Please ensure Javascript is enabled for purposes of website accessibility

Why Virgin Galactic Stock Is Coming Back Down to Earth

By Rich Smith - Feb 2, 2021 at 12:32PM

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

Virgin's no longer the only game in space-town.

What happened

Shares of Virgin Galactic Holdings (SPCE -0.46%), which exploded higher on the promise of a test flight Monday, are dropping back to Earth today -- down 4.9% as of 11:45 a.m. EST.

The reason: Virgin Galactic is rapidly facing increased competition in the space sector.

Blackboard drawing of stock chart arrow going up being erased and pointing back down

Image source: Getty Images.

So what

Celebrated at its 2019 IPO as "the world's first and only publicly traded commercial human spaceflight company," Virgin Galactic technically still holds that title, but the distinctions are starting to pile up. The past few months have given us the promise that the first "space tug" company, Stable Road Acquisition's (SRAC) Momentus, will go public. That announcement was followed in short order by the announcement of the first satellite-driven communications network for ordinary mobile phones: New Providence Acquisition's (NPA) AST SpaceMobile.

Today, a fourth potential pure-play space stock emerged, when special purpose acquisition company Holicity (HOL) announced that it will bring small rocket company Astra public through a reverse merger.

Now what

Stable Road, New Providence, and Holicity have yet to finalize their mergers. That means Momentus, SpaceMobile, and Astra have yet to officially IPO.

But clearly, the momentum is moving in this direction, and the days when Virgin Galactic founder Sir Richard Branson can boast that buying Virgin stock is the best way to "dabble a little bit in a spaceship company, own a little bit of a spaceship company," are coming to an end. One day soon, investors may cease investing in space for the novelty factor, and have to begin weighing revenues and profits -- and price -- to determine which space stock is the best bargain.  

Whether Virgin Galactic will remain top dog in that kind of contest has yet to be seen.

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

Virgin Galactic Holdings, Inc. Stock Quote
Virgin Galactic Holdings, Inc.
$6.55 (-0.46%) $0.03
Stable Road Acquisition Corp. Stock Quote
Stable Road Acquisition Corp.
New Providence Acquisition Corp. Stock Quote
New Providence Acquisition Corp.
Holicity Inc. Stock Quote
Holicity Inc.

*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 service.

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 05/21/2022.

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.