Orbital Sciences Corp (NYSE:ORB)’s shares slid over 13% today following an explosion in one of its Antares rocket, erasing nearly $250 million in market value.
Most analysts, however, believe the event won’t upset Orbital’s merger with Alliant Techsystems Inc. (NYSE:ATK).
As reported by ValueWalk, Orbital’s medium-class launch vehicle Antares rocket blasted off Tuesday from the Wallops Flight Facility in Virginia. But the 14-story rocket built by Orbital Sciences Corp (NYSE:ORB) burst into flames shortly after launch. It’s the first major accident since NASA awarded contracts to private companies to run cargo to the International Space Stations (ISS).
Following the blast, NASA drew criticism from all corners for its increasing dependence on private companies in the post-shuttle era. The U.S. space agency confirmed that no one was hurt in the disaster.
Although it’s too early to estimate how much the disaster will cost Orbital, a senior company executive indicated the rocket and cargo vessel it carried were worth more than $200 million. The Dulles, Virginia-based company had won a $1.9 billion contract from NASA to ferry cargo to the International Space Station. Elon Musk’s SpaceX was awarded a separate $1.6 billion contract by the space agency. SpaceX is scheduled to launch its fourth flight on December 9.
Orbital Sciences’ third mission
The latest mission was the fifth launch of Orbital Sciences Corp (NYSE:ORB)’s Antares rocket, and its third to pair the rocket with Orbital’s Cygnus cargo logistics spacecraft. The Virginia-based company said on its website the capsule carried 5,050 pounds (2,290 kilograms) of supplies for the station and was named for the late Donald “Deke” Slayton, an original Mercury astronaut.
Tuesday’s mission was the third such mission conducted by Orbital Sciences under the $1.9 billion contract with NASA. The privately developed Antares can power spacecraft weighing as much as 14,000 pounds into low-Earth orbit. The rocket had completed four successful missions before the October 28 accident.
NASA’s ISS program manager, Mike Suffredini said thanks to the agency’s forward planning the ISS was equipped with enough supplies to last until at least March 2015. Wednesday’s crew replacement mission will take off from Baikonur spaceport in Russia as planned and on December 9 SpaceX is due to launch a new supply mission to the station.
Jefferies analyst Howard Rubel indicated the latest explosion shouldn’t have a negative impact on the Orbital Sciences Corp (NYSE:ORB)-Alliant Techsystems Inc. (NYSE:ATK) merger. Alliant, better known as ATK, said in April that it would spin off its sporting gun business and merge with Orbital.