Why Virgin Galactic Stock broke Monday morning

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What happened

Galactic Virgo (NYSE: SPCE) The stock climbed 6.5% higher in its opening trading Monday. However, just 15 minutes into the trading day, the stock only rose 2%, and by 10:22 a.m. its gains had evaporated and the stocks were trading roughly flat to. the place where they had closed last week. It seemed investors were eager to respond to news released by the company over the weekend – but on reflection, waiting might be the best bet.

So what

Saturday, Virgin Galactic recalled investors of its next spaceplane test flight, posting a tweet confirming that it has “performed pre-flight checks on SpaceShipTwo Unity’s pen before our next flight.”

To refresh your memory, the flight window for the test in question opens on February 13. In this next attempt, Virgin hopes to demonstrate that she has fixed everything that has kept her previous test flight in December to reach space. Success this time around would set the stage for a second test flight which could take place later this month … then a test flight that would feature company founder Sir Richard Branson as the passenger … and finally, the beginning of advertising. space tourism flights.

Image source: Getty Images.

Now what

Investors and space fans responded with a chorus of cheers on Twitter over the weekend:

But while I sympathize with the excitement, it’s worth pointing out: we still have to wait until at least Saturday – if not longer – to see if this flight takes off. Opening the flight window doesn’t necessarily mean the VSS Unity spacecraft will actually fly on Saturday. Weather or other complicating factors can delay the attempt for a day or three.

And of course there is also the risk that this test will fail like the last one did. Investors might want wait and see if it works before getting excited about the Virgin Galactic stock.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.

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