What happened
Shares of space tourism pioneer Virgin Galactic (SPCE -12.17%) closed 6% higher on Thursday, a day in which there was...basically no news at all about Virgin Galactic to explain the stock's rise.
But there was some news today about another space company named "Virgin."
Image source: Virgin Orbit. As in -- not Virgin Galactic.
So what
Specifically, news about Virgin Galactic's sister company, Virgin Orbit.
Four months ago, if you recall, Sir Richard Branson's other space company -- privately owned at the time -- announced that it would go through the unconventional initial public offering (IPO) process of reverse merging into special purpose acquisition company (SPAC) NextGen Acquisition II. That plan became a reality today as Virgin Orbit completed its merger with NextGen Acquisition II and transformed into the newly Nasdaq-listed company Virgin Orbit (Nasdaq: VORB).
Virgin Orbit then proceeded to promptly drop 1.2% upon its Nasdaq debut.
Now what
Suffice it to say that these were exceedingly strange price movements. If investors were excited about Virgin Orbit's prospects as a launcher of satellites to orbit via mid-air rocket launches (that's Virgin Orbit's business, by the way), then you'd expect Virgin Orbit's stock price to rise and perhaps give a bit of a lift to Virgin Galactic as well. On the other hand, if investors were not optimistic about Virgin Orbit's business, you'd expect that stock to sell off (as it did) and maybe even drag down Virgin Galactic shares as well (which it didn't).
But investors selling off Virgin Orbit, which is preparing to conduct its third successful space launch in just over a year, at the same time as they bid up shares of Virgin Galactic, which hasn't ever achieved orbit, last visited space (briefly) in July, and doesn't expect to fly to space again until mid-2022 at the earliest?
That doesn't make any sense at all.
