Virgin Galactic: Another One Bites The Dust

seekingalpha2021-04-25

Summary Virgin Galactic went from one of the hottest SPACs on the market to one of the worst-performing stocks in recent months. The recent delay of Virgin Galactic’s test flight signals that the ...

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精彩评论

BullPumper
2021-04-26
BullPumper
只有傻子才会相信空头写得消极文章
Chimmy
2021-04-25
Chimmy
Used to hold SPCE at $20+ then when it shot up to the moon (pun intended) to $50+, Iquickly sold awayNow I am not surprised still no test flights.I would love to go back in if it drops down to below $15
Jeffrey159
2021-04-25
Jeffrey159
Very nice news
Pixiestars
2021-04-25
Pixiestars
Surprised that the share price hasn't collapsed more with the SPAC crash
- Chifield:
  pre revenue company.
HH浩
2021-04-25
HH浩
Addressable market is not as huge but storyline is sexy enough. Agreed with the conclusion by writer that, at this time, at best it is a gambling stock.
AntDee
2021-04-25
AntDee
Good

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As a result, cash burn will continue and it's unlikely that the business will be able to create shareholder value anytime soon. In addition, we find it hard to justify opening a long position in Virgin Galactic since in recent months the company's major backers have significantly trimmed their stakes in the business selling millions worth of shares. As momentum slowly fades away, we believe that the upside in Virgin Galactic stock is limited and it's better to avoid it at this stage.\nFrom Hero to Zero\nVirgin Galactic went from one of the hottest SPACs on the market to one of the worst-performing stocks in recent months. After publishing ourarticleon the company titled Virgin Galactic: This May Not End Well on February 15, the company's stock began to rapidly depreciate and now it's down over 50% since that time. The major reason behind the decline was the decision of Virgin Galactic to postpone its test flight from February to May.\nChart: Seeking Alpha\nAt this stage, Virgin Galactic's major goal is to make space tourism a reality and the company has a long-term goal of launching 400 space flights in a year. The company also says that it has 600 firm reservations, which cost $250,000 each. However, despite such an ambitious goal, there's no guarantee that Virgin Galactic will be able to achieve it since the company is still in the pre-revenue stage and it burns a significant amount of cash every quarter in order to stay afloat. While in Q3 Virgin Galactic had $742 million in liquidity, in Q4 its cash reserves declined to $666 million. In Q3 its adjusted EBITDA and a net loss were -$66 million and -$77 million, respectively, and in Q4 its adjusted EBITDA and a net loss were -$60 million and -$74 million, respectively. With such a poor financial performance and weak outlook, investors of Virgin Galactic should forget about the improvement of earnings, as the cash burn will likely continue.\nThe major problem of Virgin Galactic is that after being in the business for a couple of decades the company still hasn't entered a commercialization stage and with each postponement of its flights' investors begin to worry whether the business will be able to create any value at all in the long term. Earlier this year Virgin Galactic once again delayed its plan tooffercommercial space flights to 2022, but no one can say with certainty whether that's going to happen or not. We should not forget that the company experienced a major setback in 2014 when its spaceship broke apart in the air and it took it a few years to restart its space program. On top of that, Virgin Galactic hasn't done any test flights for more than two years, as its latest test flights were conducted in late 2018 and early 2019. Therefore, it's safe to assume that if Virgin Galactic decides to postpone its upcoming test flight again, then it's unlikely that it'll be able to offer commercial space flights in the next couple of years.\nAnother downside of Virgin Galactic is that it competes in an industry that's only in its infancy and therefore the ability to monetize its operations is minimal at this stage, while the risks are enormous. According to variousreports, the space tourism business is going to be worth only $1.3 billion by 2025, so it's hard to justify Virgin Galactic's current ~$5 billion valuation, especially since it doesn't make any money at all. Considering this, it's safe to say that despite the ambitious goals the company is extremely overvalued at the current price.\nOn top of that, another major concern is heavy insider selling in recent months. The datashowsthat in the last 12 months Virgin Galactic insiders purchased only $239,260 worth of the company's shares, while at the same time they sold over $772 million worth of shares. Just recently it was announced that Virgin Galactic's founder and CEO Richard Branson alonesold$150 million worth of shares at an average price of over $25 per share, while the company's other major backer Chamath Palihapitiyasoldhis personal stake in the business as well. In addition, Cathie Wood has beentrimmingher Virgin Galactic stake from her ARK Space ETF(BATS:ARKX)and the company currently has only 1% weight in the ETF's portfolio.\nConsidering all of this, we stick to our opinion that Virgin Galactic is nothing more than a gambling stock at this time. The company already trades at a significant premium to the overall space tourism industry even though it doesn't make any revenues at all. As a result, it's safe to assume that the cash burn will continue, and if the company once again delays its test flight in May, it might be forced to push its commercialization plans for a later date. In addition, as the company's major backers are trimming their stakes in the business, we find it hard to justify buying Virgin Galactic's shares, especially at the current overvalued price. Also, since the stock currently has a short interest ofonly16%, it's very unlikely that we'll see another short squeeze happening anytime soon, as the momentum is not there anymore and short-sellers are not shorting a significant number of shares. For those reasons, we believe that it's better to avoid Virgin Galactic as its upside is limited at this stage.","kind":"news","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[{"id":374365802,"gmtCreate":1619420568506,"gmtModify":1619420568506,"author":{"id":"3525606737319315","authorId":"3525606737319315","name":"BullPumper","avatar":"https://static.tigerbbs.com/f2bed8c34d4495dc828b63c1a6799f1f","vip":1,"crmLevel":1,"crmLevelSwitch":0,"idStr":"3525606737319315","authorIdStr":"3525606737319315"},"htmlText":"只有傻子才会相信空头写得消极文章","listText":"只有傻子才会相信空头写得消极文章","text":"只有傻子才会相信空头写得消极文章","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://laohu8.com/post/374365802","repostId":1197861709,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"CN"},{"id":375644684,"gmtCreate":1619338653048,"gmtModify":1634274124088,"author":{"id":"3565004892423880","authorId":"3565004892423880","name":"Chimmy","avatar":"https://static.tigerbbs.com/eb71d738ca2f4da611b425823ebf3c60","vip":1,"crmLevel":4,"crmLevelSwitch":0,"idStr":"3565004892423880","authorIdStr":"3565004892423880"},"htmlText":"Used to hold SPCE at $20+ then when it shot up to the moon (pun intended) to $50+, Iquickly&nbsp;&nbsp;sold awayNow I am not surprised still no test flights.I would love to go back in if it drops down to below $15","listText":"Used to hold SPCE at $20+ then when it shot up to the moon (pun intended) to $50+, Iquickly&nbsp;&nbsp;sold awayNow I am not surprised still no test flights.I would love to go back in if it drops down to below $15","text":"Used to hold SPCE at $20+ then when it shot up to the moon (pun intended) to $50+, Iquickly sold awayNow I am not surprised still no test flights.I would love to go back in if it drops down to below $15","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":3,"commentSize":0,"repostSize":0,"link":"https://laohu8.com/post/375644684","repostId":1197861709,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":375847185,"gmtCreate":1619327437547,"gmtModify":1634274199289,"author":{"id":"3582000234777011","authorId":"3582000234777011","name":"Jeffrey159","avatar":"https://static.tigerbbs.com/74fe3cdc7df1fc225205bf5f25310eb9","vip":1,"crmLevel":2,"crmLevelSwitch":0,"idStr":"3582000234777011","authorIdStr":"3582000234777011"},"htmlText":"Very nice news","listText":"Very nice news","text":"Very nice news","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://laohu8.com/post/375847185","repostId":1197861709,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":375844348,"gmtCreate":1619327372784,"gmtModify":1634274200012,"author":{"id":"3581832720375359","authorId":"3581832720375359","name":"Pixiestars","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"crmLevel":2,"crmLevelSwitch":0,"idStr":"3581832720375359","authorIdStr":"3581832720375359"},"htmlText":"Surprised that the share price hasn't collapsed more with the SPAC crash","listText":"Surprised that the share price hasn't collapsed more with the SPAC crash","text":"Surprised that the share price hasn't collapsed more with the SPAC crash","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":1,"repostSize":0,"link":"https://laohu8.com/post/375844348","repostId":1197861709,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"comments":[{"id":4128062,"gmtCreate":1619331573684,"gmtModify":1635511806108,"authorId":3578976238295519,"author":{"id":3578976238295519,"idStr":"3578976238295519","authorId":3578976238295519,"name":"Chifield","avatar":"https://static.tigerbbs.com/35652f65436cad86ed1f7c0d94afae69","vip":1,"crmLevel":4,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":375844348,"type":1,"supId":0,"prevId":0,"content":"pre revenue company.","text":"pre revenue company.","html":"pre revenue company."}],"langContent":"EN"},{"id":375840208,"gmtCreate":1619326794304,"gmtModify":1634274207330,"author":{"id":"3582015516749888","authorId":"3582015516749888","name":"HH浩","avatar":"https://static.tigerbbs.com/2639351c97027c6f71c4d9729ef216d8","vip":1,"crmLevel":4,"crmLevelSwitch":0,"idStr":"3582015516749888","authorIdStr":"3582015516749888"},"htmlText":"Addressable market is not as huge but storyline is sexy enough. Agreed with the conclusion by writer that, at this time, at best it is a gambling stock.&nbsp;","listText":"Addressable market is not as huge but storyline is sexy enough. Agreed with the conclusion by writer that, at this time, at best it is a gambling stock.&nbsp;","text":"Addressable market is not as huge but storyline is sexy enough. Agreed with the conclusion by writer that, at this time, at best it is a gambling stock.","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://laohu8.com/post/375840208","repostId":1197861709,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":375830239,"gmtCreate":1619321338421,"gmtModify":1634274254283,"author":{"id":"3578284906044989","authorId":"3578284906044989","name":"AntDee","avatar":"https://static.tigerbbs.com/f7139567429f2f675e83ee1c73bbc319","vip":1,"crmLevel":4,"crmLevelSwitch":0,"idStr":"3578284906044989","authorIdStr":"3578284906044989"},"htmlText":"Good","listText":"Good","text":"Good","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://laohu8.com/post/375830239","repostId":1197861709,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"}],"isCommentEnd":false,"newsSizeData":{"likeSize":38,"commentSize":13,"repostSize":0,"favoriteSize":1,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":false,"deviceId":"web-server-community-laohu8-v3","version":"4.29.4","shortVersion":"4.29.4","platform":"web","vendor":"web","appName":"laohu8","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/1197861709"}