Virgin Galactic Holdings (SPCE) shares took off in Thursday's extended trading after the company announced a federal court granted preliminary approval of a settlement resolving two longstanding shareholder derivative lawsuits.

Legal Details

The U.S. District Court for the Eastern District of New York signed off on the proposed deal on May 19, 2026 — nearly four years after the cases were first filed in 2022.

Under the terms, Virgin Galactic's insurers will make a $2.75 million payment to the company, half of which the company will keep. Once the court issues final approval, all related claims are expected to be dismissed or declared moot.

Current and former officers and directors named as defendants have denied and continue to deny all allegations of wrongdoing.

SPCE Price Action

The legal clarity appeared to give traders another reason to buy. Virgin Galactic climbed 19.53%, to close at $4.53 on Thursday, and the news after the closing bell pushed the stock 14.57% higher to $5.19, according to market data.

The stock has been a speculative favorite among retail traders, and Thursday's volume spike suggests the settlement news drew fresh interest from momentum buyers watching for a litigation overhang to finally lift.