Shares of Rocket Lab USA, Inc. (RKLB) plummeted 5.15% during intraday trading on Thursday, following a negative development in its key rocket program.

The sharp decline came after the company disclosed that a Stage 1 tank for its next-generation Neutron rocket ruptured during a hydrostatic pressure test. The failure occurred while the structure was being tested to its limits to verify safety margins and structural integrity. While the incident caused no major damage to test hardware or facilities, it represents a potential setback for the Neutron development timeline.

Rocket Lab stated that manufacturing of the next tank is already in progress and that it will evaluate test data to determine any changes to the launch schedule, with an update expected in February. The technical issue during a critical test phase likely raised investor concerns about potential delays and increased costs for the company's flagship rocket development program.