What happened
Shares of Virgin Galactic Holdings (SPCE -1.47%) plunged on Wednesday, following a cautionary note from a prominent analyst. As of 12:25 p.m. EDT, the space travel company's stock price was down more than 13%.
So what
Morgan Stanley analyst Kristine Liwag cut her rating on Virgin Galactic's stock from equal weight to underweight. With few near-term catalysts to maintain investors' excitement, Liwag sees Virgin Galactic's share price falling to $25 -- or roughly 20% below the stock's closing price on Tuesday.
Image source: Getty Images.
Now what
Virgin Galactic made history when it successfully completed the first space tourism flight on July 11. "Welcome to the dawn of a new space age," billionaire founder Richard Branson said after safely returning from the trip.
Yet Virgin Galactic's stock price is down about 45% since that time. The historic space flight seems to have marked a near-term top for its shares.
Investors appear to have shifted their focus to the rather steep $450,000 ticket price that Virgin Galactic intends to charge for its space flights -- and the likely impact that will have on demand.
Several analysts have also warned about the stock's lofty valuation in recent weeks. And after Liwag highlighted this risk in her report today, many stockholders apparently decided to sell their shares.
