Virgin Galactic (SPCE) Short Squeeze Case

Virgin Galactic SPCE

IT has been a crazy few days for Virgin Galactic / Ticker: SPCE.  Stock is up more than 70% in the last 5 days. During its peak it reached 60$ mark today. Here is why we think it can go up even higher, much higher.

SPCE is one of the most shorted stocks according to the latest data.

Most Shorted Stocks

Recently we have seen on the example of GME that shorted stocks can skyrocket when the short squeeze occurs.  Short squeezes result when short sellers of a stock move to cover their positions, purchasing large volumes of the stock relative to the market volume. Since covering their positions involves buying shares, the short squeeze causes a further rise in the stock’s price. This newly increased price can, in turn, trigger additional margin calls and short covering, which in turn may drive up the price further still in a vicious feedback loop.

For a short squeeze to occur some event must happen that sparks the first price rise. In the case of GameStop everything started with good earnings and the announcement of a change in management.  In the case of Virgin Galactic, the process has already started caused by the hype of Ark invest announcing recently that they will be creating a new space exploration ETF. Ark is already buying SPCE for their ARKQ ETF, in large quantities:

Ark Trading Desk

The buying Process will only continue as ARKX starts trading where Virgin Galactic will be one of the top Holdings.

SPCE stock is supported such influential investors as Cathie wood of Ark Invest (who predicted rise of Tesla) Chamath Palihapitiya (who is not only influental in stocks world but also respected in crypto investing industry) and Billionaire Richard Branson.

According to one study, over the next five years the Space Tourism market will register a 16.6% CAGR in terms of revenue, the global market size will reach US$ 1180 million by 2024, from US$ 550 million in 2019. This means that SPCE can capitalize on this.

The process has already started. How far can the SPCE go? We are not sure, but we do believe it’s ready to skyrocket 🚀 🚀 🚀

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