May 14, 2022
  • May 14, 2022

Virgin Galactic drops below $ 20 after UBS rates it sells

By on October 18, 2021 0

By Dhirendra Tripathi – Virgin Galactic (NYSE 🙂 stock traded below $ 20 for the first time since May 21 after UBS (NYSE 🙂 downgraded it to sell it.

The downgrade follows the company’s decision to postpone the launch of its first commercial flight to the fourth quarter of 2022 from the third. The delay is due to a planned upgrade that will increase the durability of his spaceship.

Analyst Myles Walton estimates the stock will reach $ 15. It hit a low of $ 19 so far in the current session today, down more than 4%.

According to Walton, the stock-for-stock trajectory is now disjointed for most of next year and with 24% of shares outstanding (32% of free float) coming out of their blocking period in late October, the action would come under pressure.

Walton said that while that doesn’t sound like much, a cumulative 2.5-year delay, longer than the time the company has been public – it debuted on NYSE on October 28, 2019 – will challenge the investor optimism on the rate of theft.

Walton said the key to making Virgin Galactic profitable is the Delta-class spacecraft, without which annual passenger revenues exceed $ 30 million compared to the company’s $ 225-250 million in annual expenses.

The company currently owns a mothership, Eve, and a spacecraft, Unity. He is developing his Delta-class spacecraft, which will have a shorter turnaround time of one week.