Galactic Virgo (NYSE: SPCE) the stock takes off again.
Surpassing its previous all-time high (reached in January), Virgin Galactic stock has surpassed $ 15.80 per share around 2:10 p.m. EST today (and is therefore up 13.3% on the day) … and the reason may surprise you.
As it turns out, the only notable news regarding Virgin Galactic today is a press release issued by the company itself. Enrico Palermo, currently president of The spaceship company (“TSC”, which builds space planes for Virgin Galactic, its sister company), has also just become the COO of Virgin Galactic.
Palermo will retain his position at TSC, arguably linking companies even more closely.
Wait. What? It is all the news there?
Yes indeed, and apparently investors think this is worth nearly $ 400 million in additional market cap to Virgin Galactic! After today’s surge, the shares of this non-profit, near-zero-income space tourism pioneer now have a whopping $ 3.1 billion valuation.
Can Virgin Galactic keep all of these earnings? May be. It’s still a long way – around 40 days – until Virgin Galactic reports its next round of financial results. The company could scare investors off by announcing more losses and no new income. Until then, bad news is unlikely to wipe out the title’s positive momentum.
On the contrary, Virgin Galactic has several weeks to report successful test flights, new registrations among customers wishing to fly in its spaceplane, and perhaps the outward luck of a successful first flight carrying paying passengers into the space.
Dear as the stocks seem to me today, I see no obvious catalyst that could bring them back down to earth.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.