Shares of Virgin Orbit (NASDAQ:VORB) are erupting higher on Friday, with shares up close to 50% on the day. What’s got VORB stock reaching for the stars?

Driving the shares higher is reports that the company is in talks to raise $200 million. Not only is that significant given its market capitalization of roughly $240 million, but it’s also notable as it would avoid a bankruptcy filing.

Until today, shares had traded like bankruptcy was a likely outcome.

Had Friday’s rally not occurred, VORB stock would have declined for a third straight week. Before today’s rally, shares were down over 70% on the year. That’s a horrendous performance, given the rally we’ve seen in the Nasdaq so far this year.

Can the stock keep up its current rally?

Sizing Up VORB Stock

According to Fintel, VORB stock only has a short interest of about 10%. However, the stock’s cost to borrow (CTB) has roughly doubled.

From here, it wouldn’t be surprising if Virgin Orbit stock was able to rally back to $1. Currently trading near 80 cents apiece and with plenty of momentum, $1 could be in the cards. If it gets there, perhaps more upside is possible as well. Especially now that the company’s biggest risk — bankruptcy — seems to be off the table.

According to reports, “SpaceX and OpenAI backing venture capitalist Matthew Brown, of Matthew Brown Companies, has confirmed that his group is in funding talks with space biz Virgin Orbit.”

Later, the report noted, “If the deal goes through, the VC wouldn’t just get controlling interest, but become the de facto owner.”

Under the terms of the deal, Brown can convert his investment from preferred shares into common stock “at the volume weighted average price in the 30 days before the deal is signed.”

It’s just the latest rally we’re seeing in a stock where bankruptcy was an imminent option. Others, like Bed Bath & Beyond (NASDAQ:BBBY) and Carvana (NYSE:CVNA), have also seen large rallies despite an uncertain future.

Despite the big move, investors should still be careful with VORB stock, not only from a volatility perspective but from an investment perspective as well. If business were going well, this move wouldn’t have been necessary. Let’s see if shares can climb to $1.

On the date of publication, Bret Kenwell 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.