Shares of Virgin Galactic Holdings (SPCE) soared 21.66% to close at $5.73 on Thursday, marking their third consecutive session of gains. The rally was fueled by heightened investor interest in the commercial space sector ahead of SpaceX's highly anticipated initial public offering.
Trading volume surged to 117.7 million shares, well above the 50-day average of 28.3 million, according to MarketWatch. The broader market also posted strong gains, with the Nasdaq Composite rising 2.54%, the Dow Jones Industrial Average adding 1.86%, and the S&P 500 climbing 1.75%.
In after-hours trading, Virgin Galactic extended its rally, jumping 13.26% to $6.49 after touching an intraday high of $6.17 and a low of $4.63 during the regular session, as reported by Benzinga. Despite the surge, the stock remains 35.62% below its 52-week high of $8.90 reached on June 1.
The positive sentiment was largely driven by external factors rather than company-specific news. Oppenheimer initiated coverage of SpaceX with an 'outperform' rating and a $190 price target, Reuters reported. Analyst Timothy Horan described SpaceX as 'the only vertically integrated AI company with the required capital, data, LLMs, hardware, manufacturing and engineering talent.'
SpaceX's IPO is priced at $135 per share, with reports valuing the offering at approximately $75 billion and the company's total valuation at around $1.75 trillion. Traders have increasingly viewed Virgin Galactic as a proxy to gain exposure to the growing commercial space market, according to Benzinga.
On the corporate front, Virgin Galactic provided a balance sheet update in a June 10 SEC filing. The company redeemed $30.524 million in principal of its 9.80% First Lien Notes due 2028 by issuing 6,734,960 shares of common stock. This debt-for-equity swap reduces near-term debt and lowers ongoing cash interest payments, but it also dilutes existing shareholders.
Virgin Galactic remains pre-revenue. In its first-quarter report released on May 14, the company disclosed $251 million in cash and equivalents as of March 31, along with a mere $0.2 million in revenue. It posted a net loss of $65 million and negative free cash flow of $93 million. During the quarter, the company raised $11 million through its at-the-market equity program, and an additional $52 million in April.
CEO Michael Colglazier noted in the update that ground testing of the SpaceShip is underway, with flight tests still scheduled for the third quarter and a spaceflight planned for the fourth. The company has emphasized that its next-generation vehicles are critical to increasing flight frequency and reducing costs.
Despite Thursday's rally, Wall Street remains cautious. Google Finance data shows six analysts have a 'Hold' rating on the stock, with a 12-month average price target of $3.61 and a high of $5.00. The stock's movement currently hinges more on space-sector sentiment, debt management strategies, and progress on next-gen flight plans than on immediate financial performance.
