The successful launch of the VSS Unity on Saturday has turned into a huge booster for shares of Virgin Galactic (NYSE:SPCE) this morning. SPCE stock is up more than 20% in pre-market trading at 8:15 a.m. Eastern.
With the space tourism company’s third spaceflight and first ever spaceflight from Spaceport America, New Mexico, investors seem to be more confident that a full-fledge commercial launch is that much closer to reality. SPCE stock gained 30.2% last week in anticipation of the launch.
“VSS Unity achieved a speed of Mach 3 after being released from the mothership, VMS Eve, and reached space, at an altitude of 55.45 miles before gliding smoothly to a runway landing at Spaceport America,” read a company press release shortly after the May 22 flight. The test has faced several delays. In December 2020, a computer glitch caused by electromagnetic interference prevented the spaceship’s rocket from firing as designed.
“We will immediately begin processing the data gained from this successful test flight, and we look forward to sharing news on our next planned milestone,” said Michael Colglazier, CEO of Virgin Galactic. The company’s spacecraft can hold up to six passengers along with two pilots. According to the BBC, there are more than 600 paying customers on a waiting list, with tickets that have been sold for as much as $250,000 each.
The flight carried revenue-generating scientific research experiments as part of NASA’s Flight Opportunities program. As well, it collected data to be used for the final two verification reports that are required as part of the current FAA commercial reusable spacecraft operator’s license.
SPCE Stock Downs Outweighing Ups
SPCE stock came to market last October in a tie-up with blank check company Social Capital Hedosophia, which raised more than $650 million in 2017 and began trading under the ticker IPOA. Founded by Sir Richard Branson’s Virgin Group in 2004, the vertically integrated company operates both a customer-facing “spaceline” business and an aerospace manufacturer.
After climbing from $17.14 on Nov. 2 to a high of $56.90 a piece on Feb. 11, SPCE stock came back down to earth, reaching a low of $15.05 on May 13.
“We view this event as a major milestone,” Michael Ciarmoli, an analyst at Truist Securities, wrote in a note to clients, according to Bloomberg.
Virgin Galactic is one of the space stocks that has garnered quite a buzz with exchange-traded funds investors in recent months after Ark Invest’s Cathie Wood launched a new ETF, the ARK Space Exploration & Innovation ETF (BATS:ARKX). Initially a top holding, according to the fund’s holdings list as of May 24, the ETF holds only 45 shares of SPCE stock. Its biggest holding, Trimble (NASDAQ:TRMB) has an 8.81% weighting. The next two, The 3D Printing ETF (BATS:PRNT) and Kratos Defense & Security Solutions (NASDAQ:KTOS), are at 6.91% and 6.45% weighting, respectively.
On the date of publication, Robert Lakin did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
InvestorPlace contributor Robert Lakin is a veteran financial writer and editor, including previous stints with Bloomberg News and as a buyside equity research editor.