New cases of coronavirus infection in New Mexico are down by more than half since hitting their recent high of 3,675 reported on Nov. 19. On Thanksgiving Day, the state saw only 1,708 new cases. And all this is good news for Virgin Galactic Holdings (SPCE -1.95%).
The company's shares got hit two weeks ago when New Mexico announced a COVID-19 "reset" and issued a health order "to blunt the unprecedented spike of COVID-19 illnesses and to attempt to relieve dramatically escalating strain on hospitals and healthcare providers across the state."
For two weeks, nonessential activities would be restricted in the state, an edict that caused Virgin Galactic to suspend preparations for its next test flight of the VSS Unity spaceplane. And that resulted in an indefinite delay in its move to begin commercial operations that would permit it to begin collecting revenues for space tourism flights.
Those two weeks are almost up. If current trends in the coronavirus hold, there's every possibility that, come Nov. 30, New Mexico will decide to lift its health order, and Virgin Galactic can get back to work.
What will this mean for the stock price? On the one hand, investors could see a lifted health order met with swift confirmation by Virgin Galactic that it has resumed launch preparations.
Alternatively, we could see a "buy the rumor, sell the news" response among traders who have bid up Virgin's stock price steadily almost every day since the health order went into effect. Once the catalyst appears on Monday, they may decide there are no more gains to be had, and sell.
Whatever happens Monday, remember this: Good news is still good news, and good news that means Virgin Galactic is moving closer to generating revenue, and profits, is good for its business, regardless of what happens to the stock price.