Sir Richard Branson, Founder of Virgin Galactic, poses for photographs before ringing a ceremonial bell on the floor of the New York Stock Exchange (NYSE) to promote the first day of trading of Virgin Galactic Holdings shares on October 28, 2019 in New York City.
Sir Richard Branson, founder of Virgin Galactic, on the floor of the New York Stock Exchange on October 28, 2019.
Drew Angerer/Getty Images
  • Virgin Galactic tumbled after the FAA announced that its flights are grounded pending an investigation.
  • "Virgin Galactic may not return the SpaceShipTwo vehicle to flight until the FAA approves the final mishap investigation report," the agency said.
  • News of the flight's mishap surfaced after a New Yorker piece detailing how the spaceflight didn't go as smoothly as portrayed.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Shares of Virgin Galactic tumbled on Thursday after the Federal Aviation Administration announced that the company's flights are grounded pending an investigation into a mishap during Sir Richard Branson's trip to space in July.

Virgin Galactic's stock price on Thursday slipped 7.26% to an intraday low of $24.85.

"Virgin Galactic may not return the SpaceShipTwo vehicle to flight until the FAA approves the final mishap investigation report or determines the issues related to the mishap do not affect public safety," the federal agency told Insider via email.

It continued: "The FAA is responsible for protecting the public during commercial space transportation launch and reentry operations."

The agency confirmed that Virgin Galactic's SpaceShipTwo did deviate from its Air Traffic Control clearance as it returned to Spaceport America. It is currently investigating the July 11 incident.

News of the flight's mishap came to light following a piece by The New Yorker detailing how Branson's spaceflight didn't go as smoothly as it appeared.

The plane, it reported, did not shoot to space steeply enough, causing it to deviate from its approved flight path on its way back down to Earth. While the two pilots, Dave Mackay and Mike Masucci, were able to correct the error and land safely, they flew outside their airspace clearance zone for one minute and 41 seconds, according to The New Yorker.

Virgin Galactic told Insider that The New Yorker report was "misleading."

Shares of the aerospace firm have swung wildly in the past 12 months, jumping to as high as $62.80, and sinking as low as $14.27.

Still, Jefferies in August put a 12-month price target of $33 on the stock, which represents a roughly 23% upside from Tuesday's closing price of $26.79.

Read the original article on Business Insider