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Why Virgin Galactic Stock Dropped Nearly 7% This Morning

By Rich Smith – Oct 2, 2020 at 1:07PM

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Sometimes stocks just go down for no good reason.

What happened

Shares of Virgin Galactic (SPCE 4.41%) dropped 6.7% Monday, soon after the news broke that U.S. President Donald Trump and the first lady have both tested positive for COVID-19. In afternoon trading, the stock remains down about 3.2% as of 12:30 p.m. EDT -- and there's still no news about Virgin Galactic itself.

So what

No downgrades from analysts. No press releases from the company. Honestly, about the closest thing I see to "news" on Virgin Galactic today is an advertisement for a non-destructive testing (NDT) supervisor on the company's Twitter account.

VSS Unity flying free over New Mexico during June 25 glide test flight.

Virgin Galactic's space testing continues apace. Image source: Virgin Galactic.

Now what

All that seems to indicate to me is that Virgin Galactic is still doing what it says it has been doing: conducting tests on its WhiteKnightTwo carrier aircraft and SpaceShipTwo spaceplanes, and preparing for its next test flight of the latter, which is scheduled to take place Oct. 22.

Although I admit I still have reservations about this stock -- until it has conducted at least one successful commercial spaceflight and brought its passengers home safely, how can one not? But lacking any negative stock-specific news today, I consider today's decline in share price more noise than signal.

In short, if you liked Virgin Galactic stock yesterday, there's no reason you should like it any less today.

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

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