Please ensure Javascript is enabled for purposes of website accessibility

Why Virgin Galactic Stock Is Still Slumping

By Rich Smith - Updated Apr 19, 2021 at 12:36PM

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 Galactic's rivals are racing ahead, while Virgin itself cools its jets.

What happened

Space tourism pioneer Virgin Galactic Holdings' (SPCE -0.46%) stock shed another 5.4% of its market capitalization through 11:11 a.m. EDT Monday morning -- partly because investors are still upset that founder Sir Richard Branson is selling his shares, but also partly because of developments outside of the company last week.

So what

Virgin Galactic, as you've probably heard by now, has suspended test flights until May. Its rivals in the space tourism market, however, aren't slowing down one bit. On April 14, Jeff Bezos' Blue Origin launched its 15th straight successful launch and landing of its New Shepard suborbital space tourism rocket, including simulated passenger embarking and debarking from the rocket's capsule module.

According to sources interviewed by CNBC, the test flight marked "the second of two 'stable configuration' test flights," and the next time New Shepard goes up, it will be carrying crew aboard -- with passengers soon to follow. In a social media post believed to refer to the advent of commercial operations, Jeff Bezos announced, "It's time."    

Just three days later, NASA announced that it has awarded SpaceX a contract to use its new Starship spacecraft (once it's proven flightworthy) to carry astronauts to the moon and back -- a strong statement in support of the space agency's belief that Starship will be safe to carry humans to space in the near future.

3 men racing in business attire, with one of them riding a rocket

Image source: Getty Images.

Now what

In short, the two biggest potential rivals to Virgin Galactic's plans to build a space tourism empire both had very good weeks last week -- while Virgin Galactic itself went nowhere. While it's possible that this momentum could reverse with a successful resumption of Virgin's test flights next month, for now, it's pretty clear why investors might be thinking that Virgin Galactic is now losing the race to space.

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.
SPCE
$6.45 (-0.46%) $0.03

*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 analyst team.

Stock Advisor Returns
323%
 
S&P 500 Returns
112%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/06/2022.

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.