Shares of Virgin Galactic Holdings (SPCE 1.55%) stock rocketed out of the gate Wednesday morning, rising more than 10% before quickly running out of gas. As of 10:35 a.m. EST, Virgin shares are still up, but only by 3%.
What turbocharged Virgin Galactic early on, and why is the stock flagging as the day drags on?
There's not a lot of news about Virgin on the wires today. In fact, the most significant announcement I've found actually appeared on the Twitter count belonging to Virgin Galactic subsidiary The Spaceship Company (officially known as "TSC, LLC" according to S&P Global Market Intelligence) yesterday.
There, TSC announced it has "aligned" its "brand" under Virgin Galactic and is "retiring" its Twitter account henceforth.
We have aligned the @TheSpaceshipCo brand under @VirginGalactic and will be retiring this account. To keep up to date on Virgin Galactic's mission to design, build and provide transformative space experiences for people around the world, please follow the @VirginGalactic account. pic.twitter.com/3cO9BzWJqG— TheSpaceshipCompany (@TheSpaceshipCo) March 9, 2021
What does that mean, exactly? Most followers of TSC appeared unimpressed by the tweet yesterday, with one dubbing it "gross marketing-speak." Investors this morning, however, may have interpreted the statement as indicative of greater integration of TSC into Virgin Galactic, and of the parent company vertically integrating its spaceship-building franchise to build a more efficient operation.
If that's what's happening, well, I'm all in favor of efficiency in the pursuit of higher profits. But it doesn't change the fact that Virgin Galactic still has no profits, essentially no revenue, and no chance of getting either of the above until it starts launching paying passengers into space.
That's still not going to happen for a quarter or three, and I see little reason to get excited about Virgin Galactic stock until it does.