As Virgin Galactic gets swept up in GameStop mania, it returns to flying

Enlarge / VMS Eve VSS gate Unit for his first captive flight over Mojave.

Galactic Virgo

At a time when non-traditional investors are buying heavily sold stocks like GameStop and AMC Networks, the hunt is on to find other targets among the shortest stocks in the market.

Among those stocks is Virgin Galactic, which has a “short free float” of around 70%. This means that institutional traders have short sold about 70 percent of the stocks available for public trading. It’s a big bet on the part of investors that the business will fail.

In the year or so since joining the New York Stock Exchange as an SPCE, Virgin Galactic has typically traded between $ 15 and $ 25 a share. Last week it climbed to $ 58.65 and has remained comfortably above $ 40 since then in trades attributed to the short-lived stock mania.

Virgin Galactic – which is developing a series of space planes to take tourists on short suborbital flights above 80 km – stands out among the list of most out-of-stock stocks. Most of these companies, such as GameStop, Bed Bath & Beyond, and The Children’s Place, are long-standing physical businesses rocked by online shopping, the pandemic, and other forces affecting profits.

In contrast, Virgin Galactic is a newcomer to the stock market and is developing a futuristic service. The company remains far from profitability and is still struggling to obtain its first space vehicle, SpaceShipTwo, in commercial service. Its best years, in terms of profitability, are in the future, if ever. This will require air missions to the edge of space frequently, perhaps on a weekly basis.

The recent increase in Virgin Galactic shares comes as the company finally resumes its powered flight program. In mid-December, almost two years after its last powered space flight, Virgin Galactic attempted to send its stylish SpaceShipTwo space plane on its third suborbital flight above 80 km.

However, shortly after the spacecraft was released from its carrier plane, named White knight two, the ignition sequence for igniting the engine of the space plane did not complete. As a result, the rocket motor failed to fire and the two pilots on board glided the vehicle safely to a runway in New Mexico rather than hovering above the atmosphere. The company subsequently began to investigate this on-board computer failure, which interrupted the ignition of the rocket engine, and began taking action to address it.

Prior to the December test flight, Virgin Galactic had established a fairly rigorous schedule, which would have included another suborbital flight with four mission specialists flying inside the SpaceShipTwo cabin to ensure its preparation for commercial operations. This was to be followed by a final test flight, carrying Virgin Galactic founder Richard Branson during the first quarter of 2021. After this point, the company intended to begin conducting trade missions with customers. paying.

Virgin Galactic said on Monday that its next test flight is now scheduled for a flight window that will open on February 13. This test flight will test the repair work carried out since the December 12 flight and evaluate the new interior cabin, which has been modernized. for passengers. The results of this test flight “will inform the next steps in the test flight program,” the company said. Trade missions are therefore unlikely until at least the second half of this year.