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Virgin Galactic Soars After ARK Investment Files for Space ETF

Virgin Galactic surges after Cathie Wood's ARK Investment Management files to launch a space exploration exchange-traded fund.

Virgin Galactic  (SPCE) - Get Virgin Galactic Holdings, Inc. Report shares surged more than 13% in trading on Thursday after ARK Investment Management filed with the Securities and Exchange Commission to launch a space exploration exchange-traded fund.

Virgin Galactic was up 13.37% at $31.24 after ARK filed its plans with the SEC. While ARK didn't identify which companies it will hold in the space exploration-focused fund, expectations are that Virgin Galactic would be one of the fund’s holdings.

Other space-exploration companies also gained on Thursday following ARK’s filing, including New Providence Acquisition and Stable Road Acquisition, two special-purpose acquisition vehicle companies also focused on beyond-Earth endeavors.

ARK to Launch Space Exploration ETF

According to the filing, ARK’s actively managed ETF will invest 80% in stocks engaged in the investment theme of space exploration and innovation, defined as “leading, enabling or benefitting from technologically enabled products and/or services that occur beyond the surface of the Earth.”

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More specifically, ARK is looking at space exploration within four distinct categories: orbital aerospace companies, suborbital aerospace companies, enabling technologies companies and aerospace beneficiary companies.

One of the most popular ETF providers in the investing world in 2020, ARK ETFs, run by Chief Investment Officer Cathie Wood, were among the top-performing ETFs in 2020. 

To be sure, Virgin Galactic is far from being on a profitable trajectory. The Las Cruces, N.M.-based company founded and partly owned by Richard Branson suffered a miss last month when a test flight was abandoned because of a technical problem.

It also revealed in a regulatory filing last month that shareholders may sell up to 112,964,840 of Virgin Galactic, the proceeds of which would not remain with the company.

The filing also noted that Virgin Galactic has incurred significant losses since inception, expects to incur losses in the future and “…may not be able to achieve or maintain profitability.”

Elon Musk's SpaceX's crewed Dragon made history last year when it became the first private company to launch Americans into orbit. 

Shares of Virgin Galactic have risen more than 120% over the past 12 months.