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Why Virgin Galactic Stock Popped Again on Monday

By Rich Smith - Jun 7, 2021 at 3:09PM

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Jeff Bezos is going to space. How cool is that?

What happened

Shares of Virgin Galactic (SPCE -4.82%) jumped 6.3% higher in Monday afternoon trading as of 1:50 p.m. EDT -- and for a most surprising reason.

The big news today isn't what Virgin Galactic is up to, you see, but what its arch rival in space tourism, Blue Origin, is doing.

A man riding a rocket and dressed in business attire zooms ahead of his two male competitors racing on foot.

Image source: Getty Images.

So what

Specifically, this morning Blue Origin announced that company Founder Jeff Bezos (and his brother Mark Bezos, too) will fly on the inaugural crewed flight of the company's New Shepard spacecraft -- along with the winning bidder of an auction to buy the first ticket on that flight.  

Bids in that auction, by the way, hit $3.2 million, and there are still five more days of bidding to go. You can probably assume that the bidding will go higher now that some lucky (and/or wealthy) customer is going to get several uninterrupted minutes with the billionaire Amazon.com (AMZN -2.86%) founder (and his brother) in which to pitch business ideas.  

Simply put: Bezos has just turned New Shepard's first-ever up-and-down trip (the spaceship isn't actually fast enough to achieve orbit) into the ultimate opportunity for the winning bidder to give him an "elevator pitch."

Now what

Of course, the broader importance of this development is this: By committing to fly himself (and his brother) to space, Jeff Bezos is implicitly giving would-be space tourists his assurance that he's 100% certain space tourism is safe. That's actually a positive development for Virgin Galactic as well as for Blue Origin because it could boost interest in the space-tourism offerings of both companies.

Long story short, Sir Richard Branson may not end up not being the first CEO to fly to space in his own spaceship. (But wouldn't that be a hilarious twist if Branson wins the bidding and becomes Bezos's first customer!?) But even if he doesn't, this is also a positive development for Virgin Galactic.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Rich Smith has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon and Virgin Galactic Holdings Inc. The Motley Fool recommends the following options: long January 2022 $1,920 calls on Amazon and short January 2022 $1,940 calls on Amazon. The Motley Fool has a disclosure policy.

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Virgin Galactic Holdings, Inc. Stock Quote
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