The volatility of the stocks is increasing with the second wave of the Covid-19 pandemic. The tourism and space exploration industry have come into a restricted zone. Virgin Galactic (SPCE) stock is a part of the Virgin Group. The Company went publicly listed in October 2019 through a reverse merger with SPAC. SPAC adopts the newest way of taking the IPO route rather than picking the traditional way.
SPAC capital-rising raises the public funds with the objective of the acquisition of the private company. SPACs are non-operative and mainly raise the money through conventional IPO offering, propose the acquisition to the shareholder base, conduction of selection process, and finally, acquiring the company. The usual price of trading SPACs is $10 per share.
Social Capital Hedosophia (SCH) was the official partner of Virgin Galactic’s SPAC; and it was founded for the special purpose listing with the opening price of $10 per stock. The stock began trading in October 2019 with the opening price of $12.34. The price went to the highest value of $42.49 on February 20, 2020. As the pandemic started its growth, the stocks saw a recent low value of $9.06. The present value of the stocks is about $24.
The initial range of the price went till $42 over the past few weeks and presently, SPCE is hovering around the $25 range. The decline of the prices is due to the lowering down of the market due to COVID issues arising throughout the world. Initially, the shares held by PIPE investors need to be registered and the warrants got redeemed with the SPCE rates going up to a certain level.
The rapid declines of the stock prices are due to the registration through SPACs. In the majority of the cases, 10% or lesser stocks are held by public and the rest ones are held by public entities or individuals, including PIPE investors (with an approximate price of $10). The market crash in March was the major reason for the shares to touch their initial trading price.
SPCE stock has its upcoming earnings call on August 3. This will reveal the actual range of the stocks and it will become easier to predict the same. The stocks aimed to reach towards high points in the early phases of 2020 but due to corona impact and the subsequent market crash, it became quite different for the company to reveal about the actual position.
August 3, 2020, is the time for the stock to have its next earnings call. The focus would be to see the space flight details and future booking trends. With the times getting ahead on the positive side, space tourism will regain its market. It would have better prospects for SPCE stock with a rewarding & exciting response. Virgin Galactic is a new venture in need of revenues. If you’re thinking about investing in SPCE stock, it may be the right time for the same.