By
Tolu Ajiboye
March 22nd, 2024
Virgin Galactic (SPCE) stock jumped 23% on Tuesday after the headlines that Virgin Orbit had won a government contract. Virgin Orbit is privately owned by Sir Richard Branson, different from the publicly traded Virgin Galactic.
Virgin Galactic Holdings Inc (NYSE: SPCE) stock jumped a whopping 23.09% on Tuesday, April 14, on what experts are speculating to be a mistaken identity. Mistaken identity, in this case, means that a huge number of investors bought the shares after news broke out that Virgin Orbit had won a government contract.
Yesterday SPCE stock closed at $19.03. However, today in the pre-market, the stock is falling by more than 4%.
But let us also explain the whole situation. On Friday, Virgin Orbit went public as the United States Space Force selected the company VOXSpace to launch three space missions with an estimated worth of $35 million.
The space tourism venture, Virgin Galactic, which is publicly traded, does not have any ownership in the Virgin Orbit. Virgin Orbit was formed in 2017 in order to develop the air-launched LauncherOne rocket.
This leaves Virgin Galactic with no material benefit of the deal between Virgin Orbit and the United States Space force.
To differentiate properly between the two companies. Virgin Orbit specializes in launching rockets for the air, instead of the traditional static ground launcher. On the other hand, Virgin Galactic specializes in space tourism, and it went public through the New York Stock Exchange a few months ago.
Virgin Galactic (SPCE) Stock Price Movements
However, not to say Virgin Galactic’s long term shape is dim, but because of the current situation where coronavirus is ravaging the stock market, the shares might not be in a position to gain all that if not by speculative trading. This is because the lockdown caused by the ongoing coronavirus pandemic has largely adversely affected its tourism business.
The rise left the stock trading slightly above $19.03, with a full Japanese candlestick, indicating a further rise may be in the cards. If the rise was not attributed to the speculative trading as according to experts, then the bulls might continue showing their tenacity amid coronavirus.
However, if the rise was solely attributed to the mistaken identity and speculative trading only, the volatility on the downside remains imminent.
On the technical side of view, it is clear that the stock value has been largely affected by the coronavirus outbreak. The stock attained the highest level in mid-February this year when they traded at around $40 per share. In the month that followed, March, the stock shed almost three-quarter of its value, to trade at around $9 per share.
In the past few weeks, Virgin Galactic has shown signs of recovering, whereby the market chart began to form higher lows and higher highs. On the long-term perspective, both Virgin Galactic and Virgin Orbit remain well-positioned to win in the future.