At the end of June, the shares of Virgin Galactic grew by 39% after the Federal Aviation Administration (USA) let Richard Branson's company take passengers on board of spaceships.

However, at the beginning of July the news about additional stock issue dropped Virgin Galactic shares by 17% overnight. As you see, these shares are extremely volatile. Last week, the swinging repeated itself, with a smaller amplitude though. Let's discuss what happened and why.

Jefferies analysts made Virgin Galactic shares grow

On the last day of summer, experts from a US investment company Jefferies, namely Greg Konrad and his team, initiated coverage of the shares of Richard Branson's space project. They set the target price at $33, and as you remember, on August 30th the shares of Virgin Galactic closed at a decline to $24.88. The recommendation was changed to "Buy".

Mister Konrad thinks that by 2030, the space-bound commercial market will reach $120 billion, the revenue of Virgin Galactic amounting to $1.7 billion. Jefferies analysts forecast that in the nearest future, technical capacities of the company will grow alongside the demand for its services, and the number of flights will reach 660 a year.

Such a bright forecast of Jefferies experts on the same day made the shares of Virgin Galactic Holdings Inc (NYSE: SPCE) grow by 8.96% to $27.11. This was the highest leap of the quotations this August.

News about cooperation with Italian air forces livens up the market

On September 2nd, on the official website of the space holding we could read that at the end of September or the beginning of October a joint flight with the Italian air forces would be organized. Virgin Galactic will send its European affiliates to space with a research mission. The goal is to study human bodily and mental reactions to low gravity.

The news about the first commercial mission inspired investors, and the shares of the company started to grow. Over the trading session on September 2nd the most prominent growth amounted to 7.5%, olso that the stocks reached $28.77. However, another piece of news quickly sent the shares of Virgin Galactic back.

A regulator bans Virgin Galactic flights

On September 2nd, when fresh information about the contract with the Italian air forces was heating up interest towards Richard Branson's company, the US FAA reported about a temporary ban on suborbital flights for the company until the end of an investigation initiated.

The regulator will be finding out why on July 11th Unity-22 violated the borders of the air corridor assigned to it, thus creating a potential threat to other aircrafts and nearby localities.

On the same day, after such news from the FAA, the shares of Virgin Galactic started falling fast, ending up with a 2.99% decline to $25.99. Over the next trading session they fell even deeper to $24.28, by 6.58%.

Tech analysis of Virgin Galactic shares by Maksim Artyomov

The shares of Virgin Galactic keep falling after a temporary ban was imposed on flights. The quotations are currently trading at $24.3. With all the bad news and a loss of trust of investors, we suppose that the decline will continue to the next support level of $20.

After a breakaway of the 200-days Moving Average, it is quite probable that the decline will continue in the nearest future. However, the quotations might eventually test the level of $20, bounce off the support level, and start growing again.

Tech analysis of Virgin Galactic shares for 06.09.2021

Summing up

Over the last week, the shares of Virgin Galactic demonstrated increased volatility. On Tuesday, the shares grew by almost 9% thanks to the optimistic forecast of Jefferies analysts. On Thursday, the shares leaped up by 7.5% by closed with an almost 7% decline — due to the FAA, its investigation, and a temporary ban on flights for Branson's space holding.

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He is the guru of searching for and demonstrating hidden opportunities and insights of the market. He writes about everything that might be of interest to the investor: stocks, currencies, indices, and various business spheres. Has been “in” since 2019.