What happened
Shares of XpresSpa Group (XSPA 5.18%) were sliding today as the airport spa operator fell based on concerns about an explosion in new coronavirus cases, which pushed the broad market lower as well.
As of 1:23 p.m. EDT on Friday, the stock was down 12.2% while the S&P 500 was off 1.7%.
Image source: Getty Images.
So what
There was no company-specific news out on XpresSpa, but the stock seemed to be reacting to the growing threat of the coronavirus pandemic in a number of states as daily new cases in the U.S. are now back at record highs.
As an airport spa operator, the company has run into financial trouble since the pandemic started, and is trying to pivot to doing coronavirus testing in airports, though the company has yet to launch that service.
Today, Florida reported nearly 9,000 new cases, by far a record for the state, and Texas said it would close bars as that state is also dealing with a widening outbreak. The news has pushed stocks lower in recent days and cooled off hopes for a quick recovery, especially in the travel sector. New York, New Jersey, and Connecticut also imposed a 14-day quarantine on visitors from hot-spot states, further evidence that the country is still struggling to contain the pandemic.
Now what
In recent weeks, XpresSpa enacted a reverse split and raised $40 million under a direct offering to help it survive the crisis. The company held three earlier share offerings in March and April.
Investors seem hopeful that the coronavirus testing will help boost the company and the stock, but XpresSpa seems likely to languish if the pandemic gets worse as airport traffic will decline in response to safety concerns. At best, the testing plan seems like a stopgap measure to keep the company afloat for now.
