In 2021, Virgin Galactic was one of the top stock picks of Wall Street Bets. At the time, wannabe investors and traders were captivated by the idea of space tourism, led by the ever-daring and cradle robbing Richard Branson. 

(Source: Igor Beuker)

People bought shares, imagining themselves floating weightlessly alongside Justin Bieber, eating bon bons, and Instagramming the curvature of the Earth.

(Source: TMZ)

Fast forward to 2024, and those same investors are looking at their portfolios the same way Ben Affleck looks at Jennifer Lopez in every paparazzi photo. 

(Source: New York Post)

It’s an understatement to say that Virgin Galactic’s path has been filled with delays, setbacks, and nonstop financial woes. The company’s latest move, a 1-for-20 reverse stock split, was like trying to use duct tape to fix a spaceship. 

This desperate attempt to keep the stock price above $1 and stay on the New York Stock Exchange didn’t quite go as planned. Investors found themselves with fewer shares worth significantly less, scratching their heads and wondering if this “space uber” idea was all a scam.

Neil Ryan, a retail investor from Derbyshire, UK, captured the sentiment perfectly: “It’s the most volatile stock in my portfolio. It’s a toss of a coin whether this is going to go bust or not.” Well Neil, you probably already know the answer considering Virgin Galactic’s stock is down 82% for the year.

Delays and high cash burn rates are still major concerns considering Virgin Galactic paused its tourism flights to focus on building next-generation Delta ships, with a launch expected in 2026. 

Analysts like Oliver Chen from TD Cowen are still hopeful, suggesting that frequent flights with the new Delta ships could clear the backlog of 800 existing ticket holders in about a year. Future tickets are priced at $600,000 each, but competition from Jeff Bezos’ Blue Origin adds to the uncertainty.

In May, there was a brief moment of optimism when Virgin Galactic’s shares surged along with other meme stocks after Keith Gill hinted at his return to the market. Some traders believed this would send the stock into orbit, but the excitement fizzled faster than a cheap bottle rocket. 

Despite the setbacks, some investors aren’t willing to give up on Branson. Lee Webb, a photographer from Worcestershire, UK, who managed a Facebook group for Virgin Galactic investors (what a way to spend your time right?), well, he recently expressed cautious optimism. 

“I’m willing to ride it out because I hope that someone deep down inside the company actually knows what they are doing,” he said. But doubts persisted, especially as Virgin Galactic’s cash reserves dwindled from $416 million in early 2023 to $195 million by the end of the first quarter in 2024.

Virgin Galactic’s management is also trying to stay confident. CFO Doug Ahrens highlighted the company’s balance sheet, boasting $867 million in cash, cash equivalents, and marketable securities. CEO Michael Colglazier projected positive operating cash flow once the Delta ships launched, aiming for 125 flights carrying 750 astronauts annually, potentially generating $450 million in revenue within the first year.

For some investors, the risk seems worth it. Travis Hoium from Minneapolis, who invested 1.5% of his portfolio in Virgin Galactic, feels a sense of community with fellow investors and was holding on to his shares, hoping for exponential growth. Easy to say when you’re using risk management right? Others, like Andy Shovel, co-founder of a plant-based protein company, says he tries not to dwell on the losses. 

Some believe Virgin Galactic’s story is far from over and that the company’s next-generation spacecraft and ambitious plans still hold promise. Those on planet earth realize it was all a wild dream all along. Whether it can reclaim its former glory or become a cautionary tale in the history of Wall Street Bets remains to be seen. Perhaps Richard should get Roaring Kitty on the phone, or else his dream might come to an end soon.

Stock.News does not have positions in companies mentioned.