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Virgin Galactic Hit by Price-Target Cut, Cathie Wood Sale

Virgin Galactic shares fell after Cowen slashed its price target and Ark Investment Management’s Cathie Wood sold shares.
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Virgin Galactic  (SPCE) - Get Virgin Galactic Holdings, Inc. Report shares fell on Wednesday after Cowen slashed its price target for the space-tourism company and Ark Investment Management’s Cathie Wood sold shares from its space ETF.

The Las Cruces, N.M., unnerved investors on Tuesday as it was unable to set a date for its first test flight. It had been scheduled for this month.

The stock recently traded at $16.51, down 8.9%. It has dropped 72% over the past three months amid uncertainty about its future. The company was founded by the U.K. entrepreneur Richard Branson.

Cowen analyst Oliver Chen slashed his price target to $23 from $40 while affirming his outperform rating.

Virgin Galactic remains attractive long term but needs to demonstrate a successful first test flight to boost the shares in the near term, he said, according to Bloomberg.

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While it’s unclear when Virgin will generate revenue, the stock’s valuation is now “more reasonable,” he said.

As for Wood, her Ark Space Exploration & Innovation ETF  (ARKX) - Get ARK Space Exploration & Innovation ETF Report sold 293,962 shares of Virgin Galactic on Tuesday.

In late March, when the fund debuted, it owned 672,000 shares of Virgin, valued at about $20 million, CNBC reports. 

Now it owns just 7,622 shares, valued at about $126,500. That makes it the ETF’s smallest holding, with a 0.02% weight, CNBC says.

Ark also has sold off Virgin Galactic shares from its Autonomous Technology & Robotics ETF  (ARKQ) - Get ARK Autonomous Technology & Robotics ETF Report over the past few weeks.

On Tuesday, Virgin reported a wider-than-expected first-quarter loss. On April 20, Founder Jim Cramer discussed his thoughts about Wood’s earlier sale of Virgin stock. He called the move “quizzical.”