Virgin Galactic stock soars after weekend test spaceflight’s success

Virgin Galactic stocks witnessed a 20% jump in pre-market trading on Monday after the company’s spaceflight test in New Mexico was successful.

The company’s shares were trading at $24 up by 15% during the early trading session. Earlier this month, they dropped more than 30% for the year after previous setbacks and sales by notable shareholders, reported CNBC.

On Saturday, the space-travel company completed the first of the four human space flight tests, before it begins flying commercial customers. The launch was cut short in December and since then had been delayed for almost six months. The next spaceflight will carry four passengers to test the spacecraft’s cabin, while founder Sir Richard Branson will fly in the third test.

Virgin Galactic aims to begin flying commercial customers by early 2022. Asset management firm, AllianceBernstein, boosted its price target on Virgin Galactic from $18 to $27, on its view that the next three flights before commercial flight begin will be completed close to plan.

In a note to his clients, Bernstein analyst Douglas Harned listed two major risks to the company’s stock. “First, any serious incident could be disastrous for the business. Second, terminal value is unclear, as it is hard to assess how far the value proposition will extend,” Harned said, reported CNBC.

Virgin Galactic previously predicted that their commercial services would be launched by mid-2020. The company pushed that goal back to early 2022, by announcing that commercial spaceflights would be launched after the completion of the four spaceflights tests and a maintenance period. 

Picture Credits: Virgin Galactic