The Virgin Galactic stock price has gone parabolic in the past few weeks as investors bought the dip as signs of meme mania resumed. SPCE stock rose for four consecutive days, reaching its highest level since May 20th. It has jumped by 97% from its lowest point this year.
Why Virgin Galactic stock price has rebounded
The SPCE stock price has staged a strong comeback in the past few days, making it one of the best-performing companies in Wall Street. It surged as investors started to flock back to meme companies.
A good example of this is Opendoor, a company whose stock has experienced a significant surge in the past few days. It has jumped by over 400% this month, pushing its market capitalization to over $2.3 billion.
Other meme stocks that have surged include companies such as Beyond Meat, Offerpad, GoPro, and Tilray Brands.
The SPCE stock price has also jumped after the company completed a test flight of its spaceship, marking a significant milestone in its development. The company is planning to initiate commercial flights by the end of the year.
SPCE stock price also jumped as investors predict that it will become a major beneficiary of Donald Trump’s issues with Elon Musk. In this, the company may receive an order from NASA. It is also working to grow its international business.
Still a cash incinerator
The most recent first-quarter results showed that its future astronaut sales would open in the first quarter of 2026. It also plans to start its commercial spaceflights in the summer of 2026.
The results showed that its business was in a good place, with its cash and equivalents remaining at $567 million. These funds are probably enough to take it to the start of its commercial operations.
Virgin Galactic also narrowed its loss during the quarter as the management continued to cut costs. Its net loss narrowed to $84 million during the quarter, down from $101 million in the same period last year.
Still, the company faces some substantial risks, which makes it a risky investment despite its recent surge. One of the top issues is the ongoing dilution as the number of outstanding shares have surged.
Virgin Galactic has nearly 40 million shares, up from 11.7 million in 2020. This dilution was mostly because of its share-based compensation and capital raises as it worked on its products.
The other potential risk is that the company’s commercialization process could face substantial delays.
SPCE stock price analysis
The daily chart shows that the Virgin Galactic stock price has rebounded in the past few days. It jumped from a low of $2.70 in July to $4.35, its highest point since May 20th.
The stock has formed what appears to be a double-bottom pattern, with its neckline at $6.65. More data shows that the 50-day and 25-day Exponential Moving Averages (EMA) have formed a bullish crossover.
Therefore, the stock will likely keep rising as bulls target the resistance at $6.65 and then resume the downtrend.
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