Virgin Galactic skyrockets 22%, registers biggest gain in 10 months

By James Rogers

Shares of Virgin Galactic have rallied after trading down on 13 of the past 17 days

Shares of Virgin Galactic Holdings Inc. skyrocketed 22.4% on Tuesday, putting the stock on pace for its biggest gain since June 20, 2023, when it rose 27.1%, according to Dow Jones Market Data.

Virgin Galactic's (SPCE) stock rose on no apparent news, allowing the aerospace and space-tourism company to snap a two-day losing streak. Short interest as a percentage of Virgin Galactic's public float of shares is 25%, according to the latest exchange data. The stock traded on volume of 62.55 million shares Tuesday, compared with its 65-day average of 11.09 million shares.

The company's shares ended Monday's session down 12.2%, registering their biggest daily percentage decline since Dec. 4, 2023, when they fell 17.5%. The stock has traded down on 13 of the past 17 days.

Related: Virgin Galactic narrows losses, but the space-tourism stock drops

In a proxy statement last week, Virgin Galactic proposed a reverse stock split, which will be voted on at the company's annual meeting on June 12. The stock split will be "at a ratio ranging from any whole number between 1-for-2 and 1-for-20," the company said in the statement.

Stocktwits, a social platform for investors and traders, told MarketWatch that most people appear to be focused primarily on the company's reverse-split shareholder vote. "It goes back to the financial engineering 'meme stocks' regularly use to buoy demand for their stock long enough for them to figure out their underlying business," said Tom Bruni, Stocktwits' head of market research.

Sentiment around Virgin Galactic is in "extremely bullish" territory and message volume is high on Stocktwits, according to Bruno. The participation ratio is high too, he added, showing that there's still a good diversity of people discussing the stock. "It's not just the same few posters driving all the message activity/sentiment," he told MarketWatch.

Related: 'Everything going to plan' for Virgin Galactic as ticket prices rise, Truist says

The company's Galactic 07 mission is scheduled for the second quarter. The Galactic 07 mission will be the final flight of Virgin Galactic's Unity spacecraft before it halts commercial operations to develop its new Delta-class spacecraft.

Virgin Galactic's cash position is being closely watched. The company'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.

The company lost less money than expected in its fourth-quarter results in February, and saw $3 million in revenue, up from $1 million a year before. The top line was "driven by commercial spaceflights and membership fees related to future astronauts," Virgin Galactic said in its release.

Related: These are the space stocks to keep an eye on in 2024

Virgin Galactic also said it had a "strong" cash position, amounting to $982 million in cash, cash equivalents and marketable securities. The company saw fourth-quarter negative free cash flow of $114 million, while analysts had expected a negative FCF of $130 million.

The company's stock is down 62.4% in 2024, compared with the S&P 500 Index's SPX gain of 6.3%.

-James Rogers

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04-23-24 1630ET

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