Virgin Galactic's Stock Soared to Start the Week. Now It's Coming Back to Earth.

To the moon? Perhaps not—but shares of suborbital flight company Virgin Galactic are certainly on a ride this week.

Shares of Virgin Galactic (SPCE) vaulted higher Monday, rising more than 20% to prices not seen since 2024; now they're coming back to earth, with the stock down nearly 40% Tuesday morning. Even after their leap, the shares still traded at single-digit prices—and even after a remarkable May, during which the stock rose more than 250%, the company's market capitalization remained below $1 billion. The soaring highs above $1,000 the shares commanded about half a decade ago are now distant in both temporal and market terms. They're now changing hands below $5 apiece.

Why all the excitement for Virgin? Stocks are at highs, so there's more appetite for—forgive the pun—fliers. Elon Musk's SpaceX is moving closer to an IPO, which has fired up enthusiasm in all sorts of companies and ETFs associated with the skies above. (Some of those ETFs have been as hot as, or hotter than, the hottest memory stock offerings.) And while we won't presume that the fact that Virgin's ticker symbol, SPCE, and the one SpaceX hopes to use, SPCX, aren't far off from each other, the similarity is uncanny.

Individual-investor excitement has undoubtedly helped. Daily retail inflows into the stock have popped lately, according to Vanda Research, joining a push into space stocks that was until recently more focused on companies such as Rocket Lab (RKLB) and RedWire (RDW).1 Short-sellers getting squeezed—in short, buying driven by people who were betting the stock would fall closing out those bets as it rose—likely fueled the runup too, according to S3 Partners.2

There are other reasons investors may have turned their eyes back toward the company founded by (but not currently run by) Richard Branson. Virgin last month said its craft was back in New Mexico for test flights "designed to prepare the company’s pilots and operations teams ahead of new Spaceship operations," with commercial operations aimed at the fourth quarter.3 An investor late last month revealed in a filing that it owned nearly 10% of the company's common shares.

Today's drop may have been associated with news that Virgin said it would issue shares to pay down debt.4 But it's also likely, at least in part, gravity doing what gravity does.