Space-related stocks have been quite popular over the past few months, although their popularity has been eclipsed by the crypto market. However, while cryptocurrencies are largely available to anyone, there are very few space companies out there, and even fewer are publicly listed right now. Elon Musk and Jeff Bezos’ SpaceX and Blue Origins remain private companies, but Richard Brunson’s Virgin Galactic (NASDAQ: SPCE) is currently publicly traded, and many investors have flocked to it over the years. Shares of Virgin Galactic surged this morning after the company confirmed a much-anticipated test flight would happen later this month.
In a statement on Thursday, Virgin Galactic said that the next rocket-powered test flight of its SpaceShipTwo craft would take place on May 22, assuming weather permits. The flight would be crewed by two pilots and would carry research equipment and payloads, as per the NASA Flight Opportunities program. Investors have been waiting for news about a test flight for a while now, leading to a lot of speculation and excitement about when the next launch would be.
“Following a detailed inspection and thorough analysis of our mothership, Eve, we have cleared our Spaceflight System for our upcoming flight. I want to thank our incredibly talented team of engineers, maintenance crew, quality inspectors and support staff for their diligence and hard work, which is testament to our commitment to safety and the integrity of our flight test program,” said CEO Michael Colglazier in a statement.
Shares of Virgin Galactic jumped over 15% in response to the news. While the company’s stock surged during the first quarter of 2021, prices have since fallen back by more than 70% after hitting a high of around $60 in February. Most analysts are bearish on Virgin Galactic right now, as most experts wonder just exactly how the company can turn a profit anytime soon.
While a lot of people are excited about space stocks, the business model behind a lot of these companies doesn’t seem entirely feasible. Generally, space stocks with the most long-term opportunity tend to be satellite manufacturers rather than rocketry companies. Commercial space flights, in particular, seem like a niche of the space industry that’s the hardest to turn a profit from.
More than anything, Virgin Galactic’s excitement is largely due to the fact there aren’t any other similar stocks on the market. Investors want to invest in SpaceX and Blue Origins, but they can’t. As such, they look for a proxy investment vehicle that could fill that speculative void, and Virgin Galactic manages to fit that role. If SpaceX or Blue Origins did go public, I’d expect interest in Virgin Galactic to almost completely die off.
Virgin Galactic Company Profile
Virgin Galactic Holdings Inc is a United States-based vertically-integrated aerospace company pioneering human spaceflight for private individuals & researchers, and it also manufactures advanced air and space vehicles. Using its technologies, it is developing a spaceflight system designed to offer its customers a unique, multi-day, and transformative experience. This culminates in a spaceflight that includes views of Earth from space and several minutes of weightlessness that will launch from Spaceport America, New Mexico. –Warrior Trading News
