Insider Brief
- Bleecker Street Research claims Rocket Lab’s (RKLB) Neutron rocket is unlikely to launch in mid-2025, with experts estimating delays to mid-2026 or later.
- The report suggests Rocket Lab faces financial challenges, needing $300-$600 million to complete Neutron’s development, likely requiring additional capital raises.
- Competitive pressures from SpaceX and regulatory delays at the launch site further complicate Rocket Lab’s outlook, potentially jeopardizing lucrative government contracts.
- Image: Rocket Lab
Rocket Lab (RKLB) has told investors its next-generation Neutron rocket will launch in mid-2025, but new analysis suggests the timeline is unrealistic, raising questions about the company’s financial health and future prospects.
The report may be behind the sudden drop — 9 percent — of Rocket Lab’s stock on February 25, NASDAQ is reporting.
Delayed Launch Raises Red Flags
According to Bleecker Street Research — which publishes “public short ideas” for stock-shorting firm Bleecker Street Capital, its parent company — Rocket Lab has misled investors about the feasibility of its 2025 launch target. Industry experts and former employees estimate a more likely timeline of mid-2026 to mid-2027, citing delays in key areas such as engine development, structural production, launch pad construction and transportation logistics.
Bleecker Street Research reviewed federal and state filings, technical documentation, and conducted 23 interviews with industry experts. The findings indicate Rocket Lab’s development of Neutron is far behind schedule, making its ability to compete for lucrative National Security Space Launch (NSSL) Phase 3 Lane 1 contracts uncertain. Without Neutron operational, the company may struggle to justify its current $11.2 billion valuation, which has surged 485% over the past year, according to the financial research firm.
Financial Pressures and Capital Needs
Bleecker Street Research reports Rocket Lab had $504 million in cash as of September 2024, but experts estimate it will need between $300 million and $600 million to complete Neutron’s development and reach profitability. This suggests the company will likely have to raise additional capital through debt or equity offerings, diluting existing shareholders.
A former senior executive at Firefly Aerospace told Bleecker Street: “They’re going to have to do something to raise more money… I think they’re going to need a cash infusion before they’re profitable on Neutron. I think that’s what they’re fighting right now. They have a runway that is decreasing that’s saying they have to launch, and they’re trying to keep the stock price [up]… they have to be honest about where their schedule’s at.”
Despite Rocket Lab’s claims that Neutron launch contracts are priced at $50-$55 million per launch, Bleecker Street Research believes the company is offering discounts to secure business. The report identifies E-Space, a little-known satellite startup, as Neutron’s only announced customer.
Two industry experts quoted by Bleecker Street Research cast doubt on E-Space’s financial stability, warning it could fail to pay for its launches or withdraw from the deal entirely.
Competitive Landscape and Market Challenges
Rocket Lab’s move into medium-lift launches with Neutron is a direct attempt to compete with SpaceX’s Falcon 9, which dominates the market. In 2024, SpaceX accounted for 86% of global upmass launched, while Rocket Lab ranked ninth with less than 0.1%. The Electron rocket, Rocket Lab’s current workhorse, generates between $5.5 million and $8.5 million per launch but is increasingly sidelined by Falcon 9’s lower-cost rideshare options.
A senior aerospace executive told Bleecker Street: “Falcon 9 really just picks its own price… If Neutron comes in at $50 million, I would say with confidence that SpaceX just lowers Falcon 9 to $50 million and it still continues to make money, still continues to drive market share… If you’re looking at the two launch vehicles at the same price, you’re competing with 400 launches vs. a first launch or even 10th launch vehicle with tons of risk still there. That risk manifests itself at a higher insurance rate. For Falcon 9, the customers pay 1-2%, but a new launch vehicle that comes online from a non-derived launch vehicle class, their rates are probably going to be 10-12%. So their customer is going to pay another $5 million to insure their launch in the earlier days of Neutron. Neutron has to price that in. Not only do you have to beat Falcon 9, you have to beat Falcon 9 plus a higher insurance price [as a commercial customer].”
The viability of Neutron depends on Rocket Lab’s ability to develop a reusable rocket that can compete on cost and reliability.
However, Bleecker Street Research notes that achieving reusability could take three to five years, putting further strain on Rocket Lab’s financial position. Additionally, even if Neutron reaches the market, experts cited in the report warn that SpaceX could simply lower Falcon 9’s pricing to squeeze Rocket Lab out.
Infrastructure and Regulatory Barriers
Beyond rocket development challenges, Rocket Lab faces logistical and regulatory obstacles. Neutron’s launch pad at NASA’s Wallops Flight Facility in Virginia remains under construction, with water infrastructure issues pushing readiness to early 2026. Transporting the rocket to the launch site is another hurdle, as Rocket Lab’s initial plan to deliver Neutron via beach landings was scrapped due to environmental concerns. A new plan to dredge a shipping channel is expected to take 12-24 months for regulatory approval and construction, delaying the project further.
Bleecker Street Research also highlights engine development as a potential bottleneck.
The Archimedes engine, intended to power Neutron, is still undergoing modifications. Rocket Lab released images of a revised “V2” version in early 2025, but experts quoted in the report suggest this indicates the original design had issues. Without a fully qualified and production-ready engine, Neutron’s first flight could be pushed even further.
One aerospace expert told the firm: “You have to be wary of what the engine consists of. I see a pump on it, but I don’t see a flight-like package of all of its avionics working together on a single system. It says hot fire… but it doesn’t talk about duration, it doesn’t talk about performance. It said it received full thrust, but you can have full thrust with really shit efficiency, and you can be dealing with that for years. Then the payload performance is going to be shit commensurately. So yeah, I see that they have a hot fire at full thrust, but no duration and no communication that all of the engine components were in a flight-like configuration.”
National Security Contracts at Risk
One of Rocket Lab’s biggest potential revenue sources is the NSSL Phase 3 Lane 1 program, which could be worth billions of dollars in launch contracts. To qualify, Rocket Lab must demonstrate that Neutron is ready for flight by December 2025. If the first launch slips beyond this date, Rocket Lab will be locked out of these contracts until at least 2027, missing a critical opportunity to secure long-term government funding.
According to Bleecker Street Research, this explains why Rocket Lab continues to publicly maintain a mid-2025 launch timeline despite internal and external evidence of delays. If the company were to acknowledge a 2026 or later launch date, it could weaken its ability to raise capital and maintain investor confidence.
With significant delays, financial strain, and competitive pressures, Bleecker Street Research paints an even bleaker picture of Rocket Lab’s future. If the report is correct, the company’s success hinges on its ability to bring Neutron to market while securing sufficient funding to sustain operations.
If Neutron fails to launch on time or proves uncompetitive against Falcon 9, Rocket Lab may face a difficult path forward.
Read the Bleecker Street Research report in detail here.
Disclosure: Funds managed by Bleecker Street Capital are short Rocket Lab (RKLB). This article is based on findings from Bleecker Street Research and does not constitute investment advice.
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