Virgin Galactic's stock rallies as milestone mission looms

By James Rogers

Swiss National Bank also increased its position in Virgin Galactic during the first quarter

Shares of Virgin Galactic Holdings Inc. ended Tuesday's session up 22.6% as the space-tourism company prepares for the final flight of its Unity spacecraft next month.

The company's stock registered its biggest daily percentage gain since May 14, when it rose 22.12%, according to Dow Jones Market Data. Virgin Galactic shares (SPCE) also snapped an eight-session losing streak.

Short interest as a percentage of Virgin Galactic's public float of shares is 27.8%, according to the latest exchange data. The stock rose on trading volume of 47.63 million shares, well above its 65-day average volume of 17.76 million shares.

Virgin Galactic's stock ended Friday's session down 5.2%. The company's shares are down 57.1% in 2024, compared with the S&P 500 index's SPX gain of 11.2%.

The company is fast approaching a milestone mission. Virgin Galactic is targeting a launch window that opens June 8 for its Galactic 07 mission. Galactic 07 will be the final flight of Virgin Galactic's Unity spacecraft before it halts commercial operations to develop its new Delta-class spacecraft.

Related: Virgin Galactic's better-than-expected cash burn a positive sign, says KeyBanc

Unlike the current Unity spacecraft, which has four seats for paying passengers and can make a single spaceflight per month, the Delta spacecraft will have six passenger seats and will be capable of making up to eight spaceflights a month. Delta tickets will be priced at $600,000, compared with the current ticket price of $450,000.

The flight will also mark Virgin Galactic's seventh commercial and research spaceflight, its second spaceflight this year and its 12th overall.

Virgin Galactic gave an update on its closely monitored cash position when it reported its first-quarter results last month, with the company's cash burn in particular attracting attention.

Related: Virgin Galactic sets date for Unity spacecraft's final commercial flight

Virgin Galactic guided for lower-than-expected second-quarter revenue. However, analyst firm KeyBanc Capital Markets pointed to Virgin Galactic's lower-than-expected cash burn as a positive. Of 10 analysts surveyed by FactSet, two have a buy rating, five have a hold rating and three have an underweight or sell rating for Virgin Galactic.

Separately, the Swiss National Bank also increased its position in Virgin Galactic during the first quarter, according to a filing with the Securities and Exchange Commission.

Virgin Galactic ended the first quarter with cash, cash equivalents and marketable securities of $867 million, compared with $874 million at the end of the same period last year. The company's cash position is being closely watched. Virgin Galactic's shares slid in December after founder Richard Branson ruled out further investment in the space-tourism company, which had recently fleshed out its near-term growth strategy.

-James Rogers

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05-28-24 1943ET

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