Shares of XpresSpa Group (NASDAQ:XSPA) surged as much as 32% this morning as investors reacted to the spa-turned-Covid-19 test center operator’s latest announcement. The action has curbed a near-40% downhill run in XSPA stock that kicked off in early October.
What is the XpresSpa news? Well, the company will kick off on-site testing for select United Airlines (NASDAQ:UAL) travel routes at Newark Liberty International Airport and Denver International Airport. It is the latest in a pandemic-fueled pivot for XpresSpa airport spa locations.
Just days before Christmas, the company’s XpresCheck unit will support direct flights to Hawaii creating air bridges between more airports and vacation destinations, so travelers can return to safer travel during the COVID-19 pandemic.
XSPA Stock Is Contentious
To be sure, XSPA stock has shown itself to be a love-it-or-hate-it investment. Its business model, like so many others in the travel business, was slammed by the Covid-19 pandemic.
But, the company got smart. It moved to providing virus testing services in its airport locations, and saw XSPA stock surge in June. But that didn’t last long, and shares fell below $1.50 earlier this month.
Was it the imminent arrival of vaccines — and the promise of a return to normal — that drove down the shares? As InvestorPlace analyst Louis Navellier wrote earlier this week, “this is undoubtedly a major factor in the price decline of XSPA stock. However, let’s not assume that the need for Covid-19 tests will simply disappear.”
Vaccines aside, the underlying business supporting XSPA stock remains a strong one. Travel will come back, and in the meantime, the company is taking the lemons it’s been handed and is making lemonade.
The United deal is one more inroad that it has with a major airline, and that can’t be a bad thing. Meanwhile, the once-$50 shares are under two bucks a piece. That could just be the opportunity investors have been waiting for.
On the date of publication, Robert Lakin did not have (either directly or indirectly) any positions in the securities mentioned in this article.
InvestorPlace contributor Robert Lakin is a veteran financial writer and editor, following fintech, agtech and property tech startups.