By
Steve Muchoki
February 29th, 2024
According to ARK Investment’s SEC filing, its Space Exploration ETF will focus on companies that are “leading, enabling, or benefitting from technologically enabled products and/or services that occur beyond the surface of the Earth.”
Virgin Galactic Holdings Inc (NYSE: SPCE) shares have been in a rally lately. Following the news about its sister company Virgin Orbit ready to re-launch a satellite into orbit, Virgin Galactic stock recorded a 6.81% increase on January 12, after a series of declines reaching the price level of $26.66. On January 13, SPCE stock went higher, to $29.29. On Thursday, it surged almost 20% in trading reaching a level of $33.03. Such a jump of Virgin Galactic stock followed the filing of ARK Investment for space exchange-traded fund (ETF).
ARK Investment’s Space Exploration Plan via ETF
Space exploration and space tourism have been popular in 2020, and these fields will significantly grow this year. Therefore, ARK Investment decided to be abreast of the times and invest in the space industry as well. On Thursday, ARK Investment Management filed with the Securities and Exchange Commission (SEC) to launch a space exploration exchange-traded fund.
As ARK Investment has stated, it seeks to “provide exposure to companies involved in space-related businesses.” Those include reusable rockets, satellites, drones, and other orbital and sub-orbital aircraft. The company believes these innovations may transform logistics, observation, agriculture, telecom, drones. Besides, they may even put humans on Mars.
According to ARK Investment’s SEC filing, the ETF will invest 80% in stocks engaged in the investment theme of space exploration and innovation. Besides, the Space Exploration ETF will focus on companies that are “leading, enabling, or benefitting from technologically enabled products and/or services that occur beyond the surface of the Earth.”
ARK Investment did not reveal which companies it will hold, however, Virgin Galactic is likely to be there.
Virgin Galactic Stock Soars
Following the news, Virgin Galactic stock rocketed, adding as much as 20.58% to $33.22 during the trade on Thursday. It closed 19.85% up, at $33.03. After hours, SPCE shares slightly declined by 0.09% to $33.00. Virgin Galactic’s market cap is $6.46 billion. Year-to-date, SPCE stock is 39.19% up.
According to InvestorPlace analyst Luke Lango, SPCE stock is a “long-term winner”. As he has explained, it is expected the company will have 12 operational space ships by 2030, conduct five flights per month, with six passengers on each flight, at an average ticket price of $300,000. In addition, Lango said Virgin Galactic’s space tourism business could power about $1.3 billion in revenues. With this in mind, he predicts earnings per share will rise toward $2.50 by 2030.
However, some are not as positive about SPCE stock as Luke Lango. Last month, Virgin Galactic announced its test flight failed. After that, the company said in a regulatory filing that shareholders may sell up to 112,964,840 shares, the proceeds of which would not remain with the company. The company has also warned that they expect to “incur losses in the future” and “may not be able to achieve or maintain profitability.”