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Virgin Galactic Pares Gains on Short Seller Chanos's 'Joke'

Virgin Galactic pares gains after the short seller Jim Chanos reportedly says he was joking about going long the space companies.
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Virgin Galactic Holdings  (SPCE)  came back to earth Tuesday after a noted short seller reportedly claimed he was joking about going long any of the space companies that have gone public.

Shares of the Las Cruces, N.M., company, which was founded by the U.K. entrepreneur Richard Branson, were up 1.3% to $22.97, after climbing earlier in the session.

Reuters had reported that Jim Chanos, president and founder of Kynikos Associates of New York, said during a conference sponsored by Grant's Interest Rate Observer that he would go long any of the space companies that have gone public.

The news sent Virgin shares higher. However, CNBC Halftime Report host Scott Wapner said Chanos was not serious when he made the comment.

"Since there seems to be some confusion in the markets," Wapner said on Twitter, "Jim Chanos tells me he was JOKING when talking 'positively' about space-related companies, which may be moving on his perceived bullish comments. It was a joke, folks. Back to your regularly scheduled trading..."

Kynikos Associates did not immediately respond to a request for comment.

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On Monday, Virgin Galactic President Mike Moses told New Mexico state lawmakers that the first test space flight from Spaceport America will happen sometime this fall. That's the final step before taking paying customers into space, according to KOB News.

"Pretty big milestone. New Mexico will join California and Florida as only the third state in the U.S. to host human spaceflight missions and send people into space,” Moses said.

Virgin Galactic has already moved into Spaceport America and is the main tenant. 

Last month, Susquehanna analyst Charles Minervino initiated coverage of Virgin Galactic with a positive rating and $20 share-price target.

“While this is an untested market, we believe SPCE’s offering will be tapping into significant latent demand for space tourism," he said.

Virgin Galactic is an “innovator of space technology with a truly unique offering that will allow civilians and professionals alike to access space for entertainment and research purposes,” Minervino wrote. 

In August, company posted a net loss of $63 million, or 30 cents a share, vs. a loss of $41 million, or 23 cents a share, in the year-earlier period. Analysts polled by FactSet had been expecting a loss of 26 cents a share.