What happened
It's Tuesday, and just like Monday, space tourism pioneer Virgin Galactic Holdings' (SPCE +3.63%) stock is down again -- falling 6.1% through 10 a.m. EDT.
Last week, Virgin Galactic stock got rocked by news that the company's founder, Sir Richard Branson, sold off another big chunk of shares. Today, the threat is coming from outside the company, as Cathie Wood's ARK Invest funds announces the sale of two large blocs of Virgin Galactic stock that it owns, as well.
Image source: Getty Images.
So what
First and foremost, a hat tip to Wood for updating the public on her various ETFs' stock purchases and sales in near real time. For fans of the growth stock guru, this is invaluable information that she doesn't necessarily have to report as clearly as she does -- but she does it anyway, and I appreciate the effort. Now, on to the news:
As ARK's website reports, on April 19, the ARK Space Exploration & Innovation ETF (ARKX +1.73%) sold 275,204 shares of Virgin Galactic, and the ARK Autonomous Technology & Robotics ETF (ARKQ +1.21%) sold 315,600 shares of Virgin Galactic.
Now what
In total, the more than 590,000 shares that ARK just sold outweigh the 515,000 shares of Virgin Galactic that the funds bought last week, with the result that Virgin Galactic now makes up barely 0.1% of the value of all stocks owned by ARK. This apparently abrupt reversal in sentiment at ARK seems to have shaken investor confidence in the company, and as a result, Virgin Galactic shares are continuing to decline.
Will the declines continue, or will Virgin Galactic recover? That may depend a lot on whether Virgin keeps its promise to resume flight testing next month -- and whether those tests prove successful. If they do, I wouldn't be too surprised to see Virgin Galactic stock take flight again.
