Virgin Galactic (NYSE: SPCE) is experiencing investor backing after they signed a spaceflight program with NASA today. At large, Space X probably comes to mind first as opposed to Virgin Galactic. However, SPCE’s recent developments in hypersonic flights and today’s NASA deal paint a different market picture. One in which Virgin Galactic and Space X co-exist as frontrunners in the infinite space world. Investors are contemplating whether SPCE is just a microscopic step away from exploding. So let’s unravel this investing dilemma today.
Table of contents 1. Why is Virgin Galactic soaring 16% in the pre-market? 2. The rich history of Virgin Galactic. 3. Is SPCE a viable investment?
Why is SPCE stock up 16% in the pre-market? Space Centre
Tody SPCE “announced the signing of a Space Act Agreement with NASA’s Johnson Space Centre”. The overarching aim of the partnership is to encourage commercial participation in orbital human spaceflight to the international space station (ISS). SPCE created an orbital astronaut readiness program to capture the potential benefits of this NASA agreement. The readiness program involves a) selecting candidates who are interested in buying astronaut missions, b) gathering transportation resources, and c) creating astronaut training packages. Overall, the agreement signifies Virgin Galactic linking arm and arm with NASA to bring the orbital travel market to the space economy.
Investors interpreted the announcement to be an increase in potential revenue, market, and overall growth in SPCE. Also, the agreement highlights how NASA views Virgin Galactic as a reputable and equipped space company . Further compounding the growth significance of the partnership. Hence, why Virgin Galactic is trading 16% higher in the pre-market.
The short history of Virgin Galactic (SPCE) and the “Billionaire Space Race”
Virgin Galatic (NYSE: SPCE) founded in 2007, has been a pioneer in the search for a way to commercialise an otherwise untouched industry they call Sub Orbital Space Tourism. The partnership announced with NASA today is a clear cut sign space travel is becoming more and more imminent. The Billionaire Space Race refers to the well-known entrepreneurs Elon Musk and Richard Branson and their expedition to make space tourism attainable to the human population. SPCE since IPO inception has seen some volatile periods of trading, especially with COVID-19 rattling investor confidence. SPCE has only been publicly traded on the NYSE for 8 short months however has already seen heights of $37+ Pre-COVID19.
COVID-19 took a toll on SPCE as investors feared the downturn in the economy would only slow the progress of Virgin Galatic in its expedition for space travel. Since bottoming out at $10 in April (highest COVID-19 peak in the US to date), SPCE has slowly climbed it’s way back up to $15 before finding equilibrium today at $17.26. Although SPCE remains hard to predict due to such a short period of trading on the NYSE, it has proven it’s strong long term investor backing an asset for years. In my opinion, Space Travel is inevitable whether Bears like it or not. The progress by SPCE and Space X creates an exciting prospect for long term investors. However only time will tell whether or not Space Travel will be an investment that pays off in the next 15-20 years.
Is Virgin Galactic (SPCE) worth the investment?
Before I start, I am obliged to remind our viewers that this is not advice only general commentary from my extensive research in this area.
Short answer: Yes, but understand the short-term turbulence and slow long-term growth (opinion, not advice)
SPCE’s current share price ($15-$20) seems to dissapoint investors, especially when the company hit an all-time high back in February. However, investors are wondering whether the Virgin Galactic NASA agreement can lay the tracks to a new all time high. Investors should see a nice increase in rising space company over the next few days. However, the turbulent economic climate could keep SPCE frozen between the $15-$20 mark.
The most suitable investing strategy would be to take a long-term approach. (opinion not advice) The short-term future is unknown, especially with coronavirus cases picking up, countries entering recessions, and trade wars proliferating. However, all signs point towards long-term growth for Virgin Galactic. Especially in the areas of hypersonic flights and orbital space travel. Thus, cementing your position while SPCE, a company worth $3-4 billion, is still trading at 50% of its true value could be a smart idea (opinion not advice).
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The information above is not financial advice. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.
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Written by Patrick McLoughlin, and Tyger Fitzpatrick, Senior Manager, and Founder of YIG.