The stock market was combined on Monday morning, opening usually decrease however bouncing again from the worst of these losses after just a few hours of buying and selling. Nervousness in regards to the rising numbers of COVID-19 instances in a number of international locations and U.S. states has some fearing that the bull market from the March lows has gotten forward of itself. But others nonetheless consider that the reopening of the financial system will carry dividends. Simply after 11 a.m. EDT, the Dow Jones Industrial Common (DJINDICES: ^DJI) was down 57 factors to 25,815. The S&P 500 (SNPINDEX: ^GSPC) fell three factors to three,095, however the Nasdaq Composite (NASDAQINDEX: ^IXIC) picked up 25 factors to 9,972.
One of many largest movers early Monday was Virgin Galactic Holdings (NYSE: SPCE). The area tourism portion of Sir Richard Branson’s company empire has gotten numerous press recently, and a key settlement introduced this morning might open up a coveted vacation spot for would-be area vacationers. Virgin Galactic is not large enough to maneuver the entire market, however its stock noticed a pleasant acquire in consequence.
A spot to go in area
Virgin Galactic’s stock rose 9% after having opened larger by double that. The transfer adopted information from the corporate that it had entered right into a key settlement with the Nationwide Aeronautics and Area Administration that might dramatically improve the attractiveness of its area airplane journeys.
Picture supply: Virgin Galactic.
NASA’s Johnson Area Middle will work with Virgin Galactic beneath the phrases of the settlement to make it doable for industrial enterprises and personal passengers to “allow the event of a strong financial system in low earth orbit.” Virgin Galactic will provide you with what the 2 events known as a “new non-public orbital astronaut readiness program,” which can embrace the corporate discovering potential astronauts with funding to make missions to the Worldwide Area Station doable. NASA sees nice potential for the area station for scientific and technological analysis and improvement, and getting Virgin Galactic on board might dramatically improve the flexibility of personal enterprise to make the most of the sources the station has to supply.
Virgin Galactic CEO George Whitesides commented on the implications of the deal. Going past the area tourism angle will probably be a helpful diversification technique for the corporate, and, as Whitesides identified, the deal will “not solely permit us to make use of our spaceflight program but additionally supply our area coaching infrastructure to NASA and different businesses.”
Will Virgin Galactic win the brand new area race?
The massive query most traders have is whether or not the brand new NASA deal places Virgin Galactic within the lead within the new area tourism trade. Some traders have additionally checked out Elon Musk’s privately held SpaceX as a possible competitor, and SpaceX is already working with NASA in methods which might be much like what the brand new settlement with Virgin Galactic proposes.
But which may not truly be crucial consideration. Area tourism is the hook for Virgin Galactic proper now, however because it develops the expertise essential to make repeatedly scheduled spaceflight doable, the corporate will inevitably discover different purposes for its discoveries. It’d properly prove that the income that Virgin Galactic will get from its paying passengers is only a small a part of its general gross sales, particularly if corporations within the aerospace and transportation sectors find yourself licensing mental property that Virgin Galactic develops alongside the way in which.
For now, Virgin Galactic traders are happy to see NASA signing up for a extra intensive collaboration with the corporate. The place it goes will play an enormous function in defining Virgin Galactic’s long-term future — and the way profitable will probably be in remodeling the journey trade each in area tourism and past.
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Dan Caplinger has no place in any of the stocks talked about. The Motley Idiot owns shares of and recommends Virgin Galactic Holdings Inc. The Motley Idiot has a disclosure coverage.
The views and opinions expressed herein are the views and opinions of the writer and don’t essentially mirror these of Nasdaq, Inc.
