What happened
New cases of coronavirus infections in New Mexico -- which had been falling steadily in the week preceding Thanksgiving Day -- abruptly reversed course one day after the holiday. On Nov. 27, New Mexico reported 2,076 new cases of COVID-19, a 21.5% jump from the day before, and new cases continued inching up through Saturday.
Virgin Galactic Holdings (SPCE 22.38%) stock is down 2.2% in 11:30 a.m. EST trading on the news.
Image source: Virgin Galactic.
So what
So what do batches of coronavirus statistics from the New Mexico Department of Health have to do with the share price of a space stock?
Everything, it turns out. Virgin Galactic wants to begin flying tourists into space so it can begin collecting revenue from space tourism and stop losing money. The problem is Virgin's home base, Spaceport America, is located in -- you guessed it -- New Mexico.
Two weeks ago, New Mexico issued a health order instructing residents to refrain from non-essential activities in an effort to slow the spread of the virus. This health order was supposed to expire today, allowing Virgin Galactic to resume preparations for test flights and progress toward commercial operations. But now that coronavirus infections are rising again, there's a risk that New Mexico might not lift its health order, and might require Virgin Galactic to remain locked down even longer.
Now what
Things might not play out this way. On Sunday, new reported COVID-19 infections reversed course again, plunging to just 1,443 new cases -- the lowest level seen in weeks. If it turns out that the weekend's numbers were just a blip in a bigger trend of lower infections, we could still see New Mexico relent on its health order, and Virgin Galactic resume work on its spacecraft this week.
It's just that this no longer seems as certain to happen as it did a few days ago -- and that makes Virgin Galactic shareholders nervous.
