SPCE: Stocktwits loves this stock, but is it a buy? | Utradea

Photo by Francois Olwage on Unsplash

SPCE Stocktwits Talk:

To find some general information about the SPCE stock, I decided to take a look at the messages posted in the SPCE Stocktwits to see what the retail investors see in the SPCE stock.

SPCE Stock Overview:

Space tourism is a very speculative, new, and volatile sector in the stock market, and $SPCE — Virgin Galactic Holdings Inc stock is no different. SPCE has undergone some wild swings in their price over the last couple years, jumping 350%, 212%, and 250% within the span of 3 months (2020), 3 months (Late 2020 to Early 2021), and 1 month (mid 2021) respectively. These are very large spikes in the SPCE stock price and show the speculative and volatile nature of the SPCE Stock. Additionally, after each spike, the SPCE stock then went on to drop by 67%, 70%, and 56%, in the following 1 month, 3 months, and 2 moths respectively. As we can see, SPCE can provide a lot of upside, however, it is followed by a large downside (which is easier to predict than the SPCE stock spikes).

Massive Historical Shareholder Dilution for SPCE Stock Holders:

There have been some offerings of stock to help SPCE raise money over the past couple years, but what are they using this money for?

SPCE Stock Financial Position:

Typically, high growth stocks will have high dilution figures, but will have large revenue growth (even if their net income is decreasing). However, since 2020 (the start of their large dilution) SPCE’s revenues have gone from a measly $3.8M, to $3.3M, and their net income has decreased from -$210M to -$352M.

Overall Thoughts on SPCE Stock:

Overall, I think the best way to profit off of SPCE Stock is to short it or buy puts. I think that even if they have a large spike that their stock will fall back down below current prices within the weeks/months after a spike. Furthermore, I think their earnings were not good at all and there will be a correction tomorrow.

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