Virgin Galactic Crashes 32% on Settlement Dilution Fears, AST SpaceMobile Rises 10%, Planet Labs Climbs 9%

Space stocks are splitting hard in Tuesday’s session. Virgin Galactic (NYSE:SPCE) stock is crashing 32% to around $5.08 in mid-morning trading, while AST SpaceMobile (NASDAQ:ASTS) stock climbs 10% to around $116 and Planet Labs (NYSE:PL) stock advances 9% to around $50.50.

The divergence captures the latest chapter in an ongoing space-sector story. Retail-driven proxy trades are unwinding, while operating businesses keep attracting bids.

Settlement News Triggers SPCE Dilution Scare

Virgin Galactic received preliminary court approval for a shareholder derivative settlement, and that headline reignited fears around cash runway and additional share issuance. The company had already telegraphed dilution risk through its January 3 capital realignment plan, which paired debt restructuring with fresh stock issuance.

The bull case had been a low-float short squeeze tied to the upcoming SpaceX IPO, while the bear case has always pointed to recurring dilution and pre-revenue operations. Today, the bears won the argument. Virgin Galactic’s Q1 2026 revenue came in at just $227,000, with a $64.72 million net loss and free cash flow of negative $93.31 million.

A Pullback From Parabolic, Not a Thesis Break

Context matters here. Even after today’s collapse, Virgin Galactic stock is still up 55% year to date (YTD).

This is a sharp reset from extreme levels in an otherwise stable sector, with the SPCE move isolated to company-specific catalysts. Reddit sentiment confirms the whiplash: WallStreetBets scores swung from a peak of 89 (very bullish) on May 30 to a low of 19 (very bearish) by Monday evening.

AST SpaceMobile Breaks Out on Operating Momentum

AST SpaceMobile is a different animal. The satellite-to-cellular operator has real partnerships covering nearly 60 global mobile network operators and 3 billion-plus subscribers, and it reaffirmed FY2026 revenue guidance of $150 million to $200 million. The company is targeting around 45 satellites in orbit by year-end, with BlueBird 8, 9, and 10 launching on Falcon 9 in mid-June.

The numbers behind today’s move are striking. ASTS stock is up 373% over the past year. Today’s breakout suggests buyers are stepping back in after a brief consolidation.

Planet Labs Climbs on Real Revenue Story

Planet Labs offers commercial Earth imaging and geospatial intelligence with actual contracts. The most recent quarter showed record revenue of $81.25 million, up 33% year over year, with remaining performance obligations surging 361% to $672.47 million. Government contract wins span NASA, NRO, and NGA Luno B.

Planet Labs stock has rallied 1,209% over the past year, and the chart still looks steadier than SPCE stock’s parabolic episode. It’s parabolic in cumulative return, just less frantic in path. The valuation is now premium, and that’s a real risk investors may want to factor into their position sizing.

Proxy Speculation Versus Operating Exposure

The takeaway is the divergence itself: Virgin Galactic stock became a frenzied SpaceX IPO proxy, and a single settlement-driven dilution scare gutted the trade. Meanwhile, AST SpaceMobile and Planet Labs are trading on partnerships, contracts, and satellite deployments. Both names still carry headline risk and rich multiples, so investors can manage their exposure with sensible position sizing rather than chasing strength.

Watch for further SpaceX IPO timing updates, any Virgin Galactic financing disclosures tied to the settlement, AST SpaceMobile operational updates, and Planet Labs’ next contract announcements. Any announcements could shape order flows in the coming days.