Virgin Galactic (NYSE: SPCE) stock price is in a downward spiral due to the bankruptcy of Virgin Orbit (VORB). As predicted in my last week’s analysis, Richard Branson’s space tourism conglomerate is in serious financial trouble due to the collapse of its former subsidiary. Our analysis reveals that there could be more downsides for space stock.
Virgin Galactic share price closed last week with another red day. During Friday’s trading session, the stock opened lower and dropped below $3 for the first time in hits history. However, the price bounced after making the new all-time low of $2.98 and closed the week at $3.15. This meant a 22.2% price drop within a week.
NYSE: SPCE Receives Mixed Ratings
According to Bloomberg, the rating firms are taking a cautious approach to Virgin Galactic shares. Out of the eleven rating firms that rate Richard Branson’s company, six have given the ‘hold’ rating to the stock, while four firms have taken the ‘sell’ stance.
Virgin Orbit (NASDAQ: VORB) was a former subsidiary of Virgin Galactic, which went public via SPAC in 2021. After having financial troubles for months and massive lay-offs, the rocket company filed for Chapter 11 bankruptcy last week. The news tanked the Virgin Galactic stock price, which ultimately hit its all-time low.
Virgin Galactic Stock May Drop More
As mentioned in our last update, NYSE: SPCE seems to have a lot more downside. The reason is the technical support on its chart, which lies far below its current level. The price has been trading inside a descending channel for the last 14 months. The bottom of this channel has acted as a support on multiple occasions.
If we expect another bounce from the bottom of this channel, then we get a price range of $2.10-$2.30. Due to this reason, our Virgin Galactic stock price forecast is still bearish. This means a potential 25%-35% downside from the current level. On Monday, shares of Virgin Galactic remained sideways in the pre-market session.
If you actively trade stocks and cryptocurrencies, then you are welcome to join my free Telegram group for key market insights and up-to-date price analysis.
