Virgin Galactic has become one of the most talked about firms in the world over the past two weeks. And today we want to tell you why the aerospace company of billionaire Richard Branson took over the news feeds, what is happening with its stock and what predictions our analyst has regarding the future of this organization.
Regulator allows Virgin Galactic to fly into space
On June 25, Virgin Galactic posted on its website that it received permission from the Federal Aviation Administration (FAA) to take passengers on space flights. This made the long-promised and anticipated by the public and investors, the first full-crew space flight more likely.
The news just blew up the stock market: on the same day at the end of the trading session, the value of shares of Virgin Galactic Holdings Inc (NYSE: SPCE) showed an increase of 38.87%, reaching $ 55.91 per share.
The aerospace company decided not to delay the flight date and announced that it will take place on July 11. Then the media immediately took this statement as the desire of Richard Branson to overtake Jeff Bezos in the space race. Recall that the creator of Amazon said that on July 20 he will fly into space on his Blue Origin spacecraft.
Virgin Galactic’s first passenger flight
On July 9, the last trading day before the launch of the fully crewed VSS Unity spaceplane, Virgin Galactic ended the session at $ 49.2, sipping 6.62%. If we compare with the indicator for June 25, which we wrote about above, then the decrease in the value of securities was 12%.
On June 11, the carrier aircraft lifted VSS Unity to an altitude of 15 km and then the spaceplane, launching its rocket engines, independently reached an altitude of 86 km. A few minutes of weightlessness and return to Earth – the flight was perfect.
Fall of Virgin Galactic shares
Before the start of trading on June 12, the day after the enchanting success of the aerospace company, it became known that it plans to issue more than 10 million ordinary shares and receive $ 500 million for them.
The news of the additional share issue plunged the price of Virgin Galactic shares. On that day, trading ended at $ 40.69. The volume of the fall in the value of securities amounted to 17.3%. On June 13, the downward movement of quotations remained, but slowed down: the drawdown reached 7.2%, the price – $ 37.76.
Technical analysis of Virgin Galactic shares by Maxim Artyomov
“Shares of Virgin Galactic continue to decline for the third trading session in a row after the announcement of the additional issue. The quotes are now trading in the $ 37 area. Given the upward trend, we can assume that the decline will continue as part of the correction and reach the 200-day moving average.
The target is the support level at $ 30. After the test of the 200-day moving average, a rebound may occur, which will be the beginning of a new upward impulse. At the same time, one should not exclude the option of developing a trading situation, where in the future the quotes, having tested the $ 30 mark, may break through the support and continue to decline to the lower border of the ascending channel. “
Summing up the result
Virgin Galactic manages to carry out its first flight into space with a full crew on board. In anticipation of this event, the company’s shares demonstrated rapid and steady growth. However, on the very first day after the conquest of space by Richard Branson, it became known that the aerospace holding would sell additional shares for $ 500 million. Securities rushed down, reaching $ 37.76.
According to many analysts, it is this company that leads the space tourism race. Recall that experts from Morgan Stanley are confident that by 2040 this niche will generate $ 1 trillion in revenue annually. We continue to follow the developments in such a promising market: I wonder who exactly will conquer it.
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