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Why Virgin Galactic Stock Dropped 8.1% Tuesday

Motley Fool2021-05-26

Volatility continues for the space tourism company.

What happened

Shares of space tourism companyVirgin Galactic(NYSE:SPCE)dropped as much as 8.1% in trading on Tuesday following a day whenshares jumped 27.6%. At 1:30 p.m. EDT Tuesday, shares were down 6.2%.

So what

Yesterday's pop was driven by Virgin Galactic's successful space flight over the weekend following months of delays. There's no news out Tuesday, so thisgrowth stockis simply giving back some of the gains from yesterday.

VIRGIN GALACTIC'S SPACECRAFT RETURNING TO EARTH. IMAGE SOURCE: VIRGIN GALACTIC.

As essentially a pre-revenue company, Virgin Galactic is extremely speculative, and investors are grasping at any piece of news to determine where the company is going. Delays this spring caused the stock to drop, and then the latest successful space flight caused shares to rise. Don't be surprised if there are a lot of ups and downs for the company as it moves closer to commercial space flights with paying customers later this year.

Now what

If you're a Virgin Galactic investor, like me, this is some of the volatility we can expect. As flights progress, the stock will likely be extremely volatile. But what's crucial will be how much revenue and profit the company can earn once it reaches maturity. That process will take years, and until then investors are in for a bumpy ride.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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Comment9

  • MochiMama
    ·2021-05-26
    Like and comment
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    • e13v3n
      comment
      2021-05-26
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  • Darrylyd
    ·2021-05-26
    All in ??
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  • Fiqx
    ·2021-05-26
    Good luck
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  • LearnInvest
    ·2021-05-26
    Wow
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    • MochiMama
      ok
      2021-05-26
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    • henghm
      like and comment
      2021-05-26
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  • NealTong
    ·2021-05-26
    Good view 
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  • Tslverde
    ·2021-05-26
    Down again and again?
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  • Wgey
    ·2021-05-26
    Is it a fad for the market? Possibly a decade or more before it turns a profits. Will investors able to hold and patiently wait for it?
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  • thatsy
    ·2021-05-26
    To Mars and beyond! 
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  • Kelvinyoon26
    ·2021-05-26
    Like and comment 
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