So, Virgin Galactic Holdings Inc. (SPCE) shares are having a moment Tuesday morning. They're up sharply, which is the kind of thing that happens when a company reports quarterly results that... well, let's just say the market finds something to like.
Here's the deal: after Monday's close, the space tourism company reported a fourth-quarter loss of 98 cents per share. That's not a profit, obviously—it's a loss. But on Wall Street, it's all about expectations, and analysts were expecting a loss of $1.05 per share. So, losing less money than you thought you would? That's a win. Revenue, however, came in at $312,000, which missed the target of $495,000. It's a bit of a mixed bag, but the market is choosing to focus on the earnings beat.
The Spaceship Update
The more exciting news, perhaps, is about the hardware. CEO Michael Colglazier said the first new SpaceShip is nearly complete, with ground testing scheduled to start in April. That's tangible progress for a company whose entire business model is, literally, up in the air. They've also started selling what they call "limited Spaceflight Expeditions" for $750,000 a pop. Colglazier added, "We continue to strategically manage our capital to support our planned ramp in cash flow." In other words: we're spending money to (hopefully) make money later.
The Short Interest Angle
Now, here's a fun wrinkle. Short interest in Virgin Galactic recently increased from 15.40 million to 16.94 million shares. That means 23.19% of the company's available shares are being bet against. When a heavily shorted stock gets some good news—or even not-terrible news—it can trigger a short squeeze, where short sellers rush to buy shares to cover their positions, pushing the price up even more. It would take them about 10.54 days to cover all those short bets, according to data. So, part of today's surge might just be a mechanical reaction in the market.
The Technical Reality Check
Let's not get carried away, though. Looking at the charts, Virgin Galactic is still trading 3.6% below its 20-day simple moving average and 21.9% below its 100-day average. That puts it technically "below trend" on both short- and intermediate-term timeframes. Over the past year, the stock is down about 28%, and it's hanging out closer to its 52-week lows than its highs.
The momentum indicators are telling a cautious story, too. The Relative Strength Index (RSI) is at 33.93, which is in neutral territory but leaning toward the "washed out" side after an oversold reading back in early February. The Moving Average Convergence Divergence (MACD) is at -0.0915 and remains below its signal line at -0.0712. That's a bearish setup, suggesting any rallies might still face selling pressure. The combination of RSI below 50 and a bearish MACD points to mixed momentum at best.
- Key Resistance: $2.50
- Key Support: $2.00
As for the price action: Virgin Galactic shares were up 7.83% at $2.34 during premarket trading on Tuesday, according to market data. That puts it right between those key support and resistance levels. So, the stock got a boost from an earnings beat and spaceship news, maybe helped along by a bunch of short sellers, but the technical picture suggests the runway to a full recovery might still be a long one.
