Why Rocket Lab’s stock price is plummeting this week

stock rocket lab (RKLB -17.11%) Although soaring to start the week, launch specialists’ stocks lost altitude the following day. Rocket Lab, which failed to boost investor morale, on Wednesday announced disappointing preliminary results for the fourth quarter of 2023 and plans to raise capital.

Rocket Lab’s stock price fell 17.6% from the end of last Friday’s trading session to the close on Thursday, according to data provided by S&P Global Market Intelligence.

The bottom of the income statement is out of this world.

Management expects to report fourth-quarter 2023 earnings that would represent about 16% year-over-year growth, but is preparing investors for a less auspicious report on the profitability front. The company reported an adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) loss of $14.5 million for the fourth quarter of 2022, but management expects the deficit to widen from negative $28 million to negative $30 million in the recently completed quarter. do.

Investors fearing shareholder dilution also balked at the company’s plan to raise capital through a $275 million convertible senior note offering.

What should Rocket Lab investors do now?

For growth investors who see Rocket Lab as a holding, the best course of action right now is to stay put. The company’s announcement this week may seem puzzling, but there are compelling reasons not to give up on this leading space stock.

Instead of rushing to reduce or liquidate positions, investors would be better off attending the company’s Q4 2023 earnings call scheduled for February 27. Investors will then gain greater insight into the company’s financial health and receive better results. You have the ability to decide whether or not to take stocks out of your portfolio.