- NYSE: SPCE is on course to end the week on a higher note despite an early fall.
- Virgin Galactic Holdings Inc seems to shrug off the test flight cancellation in New Mexico.
- Markets are awash with cash that should bring rich customers to Virgin's space tourism venture.
There are no known cases of COVID--19 in outer space – but the virus has had an adverse impact on a tourism sector company aiming for the skies. Virgin Galactic Holdings Inc (NYSE: SPCE) has been forced to cancel a critical test flight. Authorities in New Mexico, where the module was set to launch from, canceled the trial due to the covid situation in the state.
Billionaire founder Richard Branson and his team were disappointed by calling off and even made it public via Twitter. Any delay means the company continues bleeding money. Shares reacted accordingly with a drop, but it turned around later on.
Shares bounced as bargain-seekers came in and probably as investors remembered the Branson has deep pockets. Moreover, it is essential to stress that the disappointment in New Mexico is only a delay – and unrelated to the company's performance.
Yet perhaps most importantly, the world is currently awash with cash – coming from monetary and fiscal stimulus. There may be new millionaires and billionaires making money in equity markets that could potentially sign up for Virgin space flights.
Moreover, while covid caused the recent cancelation, progress on vaccines is accelerating. Pfizer (NYSE: PFE) and BioNTech are set to submit an emergency application to use their vaccine as soon as Friday. Moderna (NASDAQ: MRNA) also reported outstanding results from its Phase 3 trial and other companies to have promising immunization schemes in the pipeline.
Once the pandemic is over, the money sloshing around the world is unlikely to be drained out and could reenergize tourism – including Virgin's orbital flights.
SPCE stock forecast
NYSE: SPCE is set to rise by 1.75% according to Friday's premarket data at the time of writing. That would complete an increase of nearly 20% from Monday's closing low of $20.89. Virgin Galactic's shares are now at the highest since early August. The next upside target is $25.54 seen in July. The 52-week high is $42.49. Support is at $20.89, followed by $18.
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