Cathie Wood's ARKX X-Factor and Virgin Galactic - A Bull CaseWhen the fundamentals no longer matter you might find the argument that neither do the technicals. While today's market-making computers can read every fundamental report and crunch previous stock performances against thousands of correlations, they are still helpless to responsibly predict when a 3rd item catalyst may come to fruition and flip the mathematically probable on their backs. I call this silent catalyst an "X-FACTOR".
X fac·tor
/ˈeksfaktər/
noun
noun: Xfactor
1.
a noteworthy special talent or quality.
"there are plenty of luxury cars around, but the S-Type has that special X factor"
2.
a variable in a given situation that could have the most significant impact on the outcome.
"the young vote may turn out to be the X factor"
In the next 3 months, Virgin Galactic has several big catalysts that should launch $SPCE back to meet previous highs:
1) Private preview of Spaceship 3 on 3/30/21 to the paid reserve via video conference (public news to follow shortly, rumors will fuel a positive stock hike). Invitations have already been sent out!
2) With the Spaceship 3 news, we hope to hear about a confirmed launch window of SS2 or SS3. There is some low-level speculation that the Spaceship 2 has been scratched due to hull integrity and no further powered flights for that ship are planned with all funding going to tests of SS3 and SS4 (SS5?). Clarification from $SPCE PR would be nice, one way or the other. Regardless, the only thing Virgin Galactic needs to do at this point is announce another official flight window, perform, and the rest will follow. NO MORE DELAYS. I've had more birthdays than successful launches in the same time frame...
3) Cathie Wood's ARKX X-Factor! - Cathie Wood is a big stock picker of Wall Street. If you don't already know who she is, a small bit of research into her ARK investment ETFs will be worth your afternoon. What you need to know NOW is that she is getting ready to release a new product: ARKX, a Space Exploration ETF, of which $SPCE will fill a significant portion of. This a BIG for the underlying price of $SPCE. Should $SPCE have another delay within the next year (which history says, yes we will), investors will look to the Wood's ARKX ETF as a secondary indicator before selling. This means that future sell-offs are less likely to happen when $SPCE is involved in the ARKX ETF where in the past, any disappointing news caused massive swings in price action.
4) The Launch - OMG - we still have a launch! After that last disappointing performance from $SPCE, we got a hint that there might be a launch in MAY. History has shown that Virgin Galactic likes to launch over the weekend and not before earnings.
5) A book. There is a book coming titled "Test Gods: Virgin Galactic and the Making of a Modern Astronaut" 5/4/21. I can't figure out if this is helpful or detrimental if it shows to confirm any negative sentiment. The release may be a sell the news event with a rebuy at any dip to the previous position.
6) Beyond that, I can only expect more launches and assuming a number of successes, a rise in prices. If you're not already in $SPCE, I might advocate $125 strike for 2022, with consideration to sell after any successful launch in 2021 to take advantage of any implied volatility spike. Rebuy.
7) I don't think we'll send non-pilots into space in 2021 (with an exception to undisclosed VIP), but if it should happen and you're deep in leaps, profit seems inevitable. Answer "will commercial flights take place in 2021" before buying a position based on a business model. Buy and sell on speculation sentiment.
My Personal sentament:
I'm very long $SPCE. I do like the underlying to be at $75 heading into 2022, but I'd buy a position that would take advantage of a $100 underlying strike in December 2021. At this point, you should go long, and you might not find a play that goes wrong. My personal play is 4/1/21 CALLS @ $30 and 2022 calls at $125 that will look to profit late summer $2021.
What's your play? let me know!
