What happened
Up 5% when markets closed on Friday, then 10% more when they reopened Tuesday, Virgin Galactic (SPCE -1.47%) stock jumped again on Wednesday to close another 14% higher.
The question is: Why?
Image source: Virgin Galactic.
So what
It's a great question, because the fact of the matter is, there's no really good reason why Virgin Galactic stock should be jumping. Earnings aren't out yet for the fourth quarter, and when they do come out (next month), chances are the headline numbers are going to look pretty lousy.
Analysts are forecasting no more than $4.5 million in revenue (for this nearly $4 billion stock) and a loss of $0.82 per share.
Assuming this is how things will play out, then, why are investors getting so excited about Virgin Galactic?
Now what
Possibly, the answer is: They're not. Not excited about Virgin Galactic, per se, at least. In discussions on the stock price movement on Twitter, people are hypothesizing that the real reason Virgin Galactic stock is moving is because there's a dearth of other real "space stocks" to buy. Not to put too fine a point on it, but some folks may be buying Virgin Galactic ... by default.
Crazy as that sounds, it does hearken back to what Sir Richard Branson, Virgin Galactic's founder, said back when the company announced its merger with publicly traded Social Capital Hedosophia in July. Specifically, that once Virgin Galactic is publicly tradeable, investors who have a desire to do so will finally be able to "dabble a little bit in a spaceship company, own a little bit of a spaceship company."
So long as Virgin Galactic remains the only way to do that, price may simply be no object -- or obstacle to the rally in Virgin Galactic stock continuing.
