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Virgin Galactic shares continue to fall. What is it this time

Virgin Galactic, stock, Virgin Galactic shares continue to fall. What is it this time

During the main trading session on Thursday, Virgin Galactic's quotes fell by 5.2%, and in the postmarket they fell by another 0.54%. The pressure was exerted by 2 significant news.

Rating

Credit Suisse has started covering VG again, setting a neutral rating with a target of $30.

Credit Suisse believes that Virgin Galactic will focus its efforts on developing a new Delta spacecraft, to update the current VSS Unity and VSS Imagine models. However, Delta will not enter service before the first quarter of 2024, and Credit Suisse does not think that Virgin Galactic will be able to build more than a couple of such machines per year.

It is also predicted that Virgin Galactic can make only 6 profitable flights with Unity and Imagine by the end of 2022. By 2023, the frequency of flights may increase to 25-30 flights. Analysts believe that VG's goal of about 400 flights a year until 2027 will not be fulfilled.

Sales 

According to SEC Form 4, executives or insiders who own a significant share of the company sold about $300 million worth of VG shares from August 10 to 12.

A similar story happened in mid-April, when Sir Richard Branson sold $150 million worth of securities. Such actions can excite investors, who can follow the example of major players and start selling shares.

In practice, shares can be sold for various reasons, but at the moment it exerts negative pressure. Given the high volatility of VG shares and its dependence on news, the current decline looks like a normal speculative movement.

Both factors caused the fall in VG shares on Thursday. In the short term, this may continue to put negative pressure on stocks.

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