Please ensure Javascript is enabled for purposes of website accessibility

Why Bloom Energy, GameStop, and Virgin Galactic Shares Bounced at Least 23% Today

By Rich Smith - Updated Apr 14, 2020 at 4:47PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Earnings are just around the corner. So will these companies earn anything?

What happened

Stock markets are bouncing back Tuesday after Monday's small-scale sell-off, and the S&P 500 ended the day up more than 3%.

Today's biggest gainers are an eclectic bunch, with companies as widely varied as Bloom Energy (BE -11.73%) (fuel cells), GameStop (GME 6.33%) (video games and consoles), and Virgin Galactic Holdings (SPCE -0.56%) (space tours!) racking up gains of 23%, 25.5%, and 23%, respectively, at the close.

Three colorful arrows racing straight up on a black background

Image source: Getty Images.

So what

There are reports that GameStop stock has seen buying from famed Big Short investor Dr. Michael Burry, who's apparently taken about a 5.3% stake in the company. I can see how that big a vote of confidence from a high-profile investor might tend to attract interest, but there's no similar news about anyone taking big stakes in Bloom Energy or Virgin Galactic.

Nor is the broader macroeconomic news looking particularly encouraging today. The International Monetary Fund just gave our current recession a name (the Great Lockdown) and is forecasting that it will be the "worst recession since the Great Depression, surpassing that seen during the global financial crisis a decade ago."  

Now what

That certainly doesn't sound very encouraging. And again, it leaves me wondering just what is going on with these three stocks today.

My best guess: Earnings season is almost upon us, with Virgin Galactic due to report its latest batch of quarterly numbers in less than three weeks. GameStop and Bloom Energy should file their own reports less than a month later, probably in early June.  

With investors' focus beginning to turn away from the latest daily update on the coronavirus and toward corporate earnings, it's possible we are seeing bets being placed that one or more of these three companies (none of which is currently profitable on a trailing-12-months basis) will either report a surprise profit or perhaps guide investors on when to expect a turn to profitability.

I don't see a lot of sense in betting on a surprise (that no one is forecasting). But today, it appears I'm in the minority in that opinion. Hope springs eternal, and today it was springing higher for shares of Bloom Energy, GameStop, and Virgin Galactic.

Rich Smith has no position in any of the stocks mentioned. The Motley Fool owns shares of Virgin Galactic Holdings Inc. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

GameStop Corp. Stock Quote
GameStop Corp.
$42.19 (6.33%) $2.51
Bloom Energy Corporation Stock Quote
Bloom Energy Corporation
$26.80 (-11.73%) $-3.56
Virgin Galactic Holdings, Inc. Stock Quote
Virgin Galactic Holdings, Inc.
$7.04 (-0.56%) $0.04

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/17/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.