How Will Google (GOOGL) Stock Be Affected By A Virgin Galactic Deal?

NEW YORK (TheStreet) -- Google Inc.  (GOOGL) is reportedly in talks with Virgin Galactic about a deal relating to satellite-launch technology according to Sky News.

Neither company is talking, NBC News reports this morning, but Sky News quoted unnamed insiders as saying that Google is thinking about putting hundreds of millions of dollars into a joint venture that would take advantage of Virgin Galactic's rocket technology, and perhaps eventually investing roughly $30 million for a small stake in the Virgin Galactic holding company.

Negotiations are thought to be at an advanced stage, and Sky News reported that negotiations have been going on for months and, sources say the talks are likely to lead to a deal with two main elements.

First, Google would provide hundreds of millions of dollars to help fund a joint venture, with Virgin Galactic contributing the technology that it has developed while trying to build its space tourism business.

Second, Google would buy a small stake - likely to be around 1.5% - in the Virgin Galactic holding company. 

Shares of Google are flat in pre-market trading.

TheStreet Ratings team rates GOOGLE INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate GOOGLE INC (GOOGL) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, disappointing return on equity and feeble growth in the company's earnings per share."

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