the stock went through a hard time the weather in recent weeks which has prompted investors to seek out air sickness bags. But an announcement on Thursday sent stocks soaring: flight tests are about to resume.
Virgin Galactic stock (ticker: SPCE) rose 14.7% on Thursday, to $ 19.81 per share. the
gained 1.1% and the
Dow Jones Industrial Average
The jump, however, still leaves the stock down about 70% from its 52-week intraday high of $ 62.80 in February.
Virgin Galactic’s stock is down, as are many other more speculative stocks. the
Defiance Next Gen SPAC derivative
The exchange-traded fund (SPAK), for example, is down about 32% from the 52-week high set in February. Virgin Galactic is part of this ETF and completed its merger with a Special Purpose Acquisition Company, or SPAC, in October 2019.
But the decline in Virgin Galactic’s stock can only be blamed on the market. The company has had some issues with its test flights, which must be completed before the company can begin business operations and generate sales.
Virgin Galactic management revealed issues with electromagnetic interference and flight control systems in late February on its fourth quarter earnings conference call, delaying test flights. Then, during the company’s first quarter earnings conference call on May 10, management revealed a new issue with parts wear and tear, further delaying testing.
Management had committed to an update and on Thursday announced that the test flight would take place on May 22, weather permitting.
Commercial flights will require more testing, with the next scheduled after full analysis of the May 22 data.
It takes longer than management wanted to start business operations. Virgin Galactic, back in 2019, projected $ 210 million in sales for 2021. Analysts are now forecasting $ 3.2 million.
Virgin Galactic is trying to put civilians into orbit, and a spacewalk is not a walk. It’s a new activity, and one might have expected delays, but the severity of the blockages clearly hurt the title. Investors are hopeful that a resumption of testing may help stocks regain some of their previous momentum.
Write to Al Root at [email protected]