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After SpaceX’s successful launch of its Dragon spaceship over the weekend, investors showed confidence in the private space exploration industry as Virgin Galactic shares rocketed northwards.
Last weekend, Elon Musk‘s SpaceX conducted a successful launch of its Dragon spaceship and docked it on the international space station. Although SpaceX is not public listed yet, investors in this market found a reason to celebrate. SpaceX’s Dragon spaceship launch marks a new milestone for carrying astronauts to orbit in a commercially developed spacecraft. Shares of Virgin Galactic Holdings (NYSE: SPCE) soared 6% on Monday, June 1. This price shows that investors are hopeful that Richard Branson’s Virgin Galactic can proceed ahead with its future plans of private space transportation.
With Monday’s, the SPCE shares were trading 60% positive year-to-date. It just eight months since Virgin Galactic went public in October 2019. Since then, Virgin Galactic has been on investors radar showing some good amount of volatility. However, today on the premarket SPCE price is at $17.42 (-0.57%).
Founded by Richard Branson, Virgin Galactic plans to charge $250,000 for a two-hour flight in the space. As of late February, the company has already received around 8000 reservations. This translates to potential revenue of around $3 billion.
SpaceX Launch Boosts Pan Industry Confidence
SpaceX’s successful launch of its Dragon spaceship sends a strong message in the space industry. While the space industry was so far largely dominated by public sectors, this marks a new chapter in history for private space explorations. Morgan Stanley analyst Adam Jonas wrote that the successful launch was “arguably the most important milestone in the US space program in nearly 40 years”. Jonas further added that there is a “significant sense of urgency to execute bolder and more audacious missions in space”.
Virgin Galatic has been quite vocal about its plans of sending tourists in space. Besides, it is the only public listed private company in the field of space exploration. As per the Bloomberg report:
“Short interest in Virgin Galactic remains elevated with roughly a quarter of shares available for trading currently sold short, data compiled by S3 Partners shows. That’s down from a peak of 47% last month before Branson’s Virgin Group Holdings Ltd. sold 25 million shares”.
Analysts are quite positive about the Space Industry’s growth in the future. As per Morgan Stanley analysts, Space Industry could be worth $1 trillion business by 2040. However, Bank of America predicts an even higher figure saying it could be a $3 trillion industry.
Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
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