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Virgin Galactic Stock Is Skyrocketing for the Stupidest Reason

Last Updated September 23, 2020 1:49 PM
Aaron Weaver
Last Updated September 23, 2020 1:49 PM
  • Virgin Galactic’s stock skyrocketed today, despite no significant news coming out about the company.
  • Similarly-named Virgin Orbit did get some good news recently. Some people think investors mistook the two companies.
  • It wouldn’t be shocking. People who throw money at Virgin Galactic probably aren’t the smartest investors in the first place.

Richard Branson’s spaceflight company, Virgin Galactic (NYSE: SPCE), surged on Tuesday, for one of the dumbest possible reasons.

A similarly-named company, Virgin Orbit, just secured a government contract. It appears as though some people may have mistaken the two companies.

Virgin Galactic
It looks like some brilliant SPCE investors made a whoopsie. | Source: Twitter 

Virgin Orbit Gets Some Great News

Virgin Galactic does not hold any stake in Virgin Orbit. The company, which is privately owned by Richard Branson’s Virgin Group, just signed a contract with the U.S. Space Force worth roughly $35 million. 

Virgin Orbit
Virgin Orbit had a great day, too. | Source: Twitter 

They will be sending dozens of satellites into orbit on three separate launches. That’s terrific news for Virgin Orbit, but Virgin Galactic stands to gain nothing from this news. That is unless the people who invest in SPCE are the same type of people who don’t read a stock ticker before pushing “buy.” Sadly, that would not be surprising at all.

Virgin Galactic’s Big Day Should Be a Wake-Up Call to Retail Investors

However it came about, Virgin Galactic had a massive day. The popular stock for retail investors surged by more than 23%.

Virgin Galactic
Virgin Galactic surges by more than 23%. | Source: Yahoo 

But nothing of note happened with the company today. Not much of note has occurred with the company in general.

Morgan Stanley analyst Adam Jonas told CNBC,  “we struggle to find additional new catalysts that have been driving the stock.”

What makes it tricky is that it has mostly been the case since SPCE went public. It reported a substantial loss  in its last earnings report, and yet, speculative investors have flocked to it.

Virgin Galactic rivals Tesla as a retail investor favorite. It’s meteoric rise reached baffling in highs of over $37 in February, despite no revenue and massive operating losses.

Naturally, it careened back down to $10 during coronavirus-plagued March. But speculative investors are clearly unshaken by the volatility.

Virgin Galactic has a nice story. Will space tourism become huge in the future? It might, but right now, it has yet to get off of the ground.

Disclaimer: This article represents the author’s opinion and should not be considered investment or trading advice from CCN.com.