Shares of Virgin Galactic (ticker: SPCE) surged 23% on Thursday, driven by market anticipation for the upcoming public listing of Space Exploration Technologies (ticker: SPCX), also known as SpaceX, which is scheduled for this Friday.

Catalysts for the Rally

The market's keen anticipation for the SpaceX IPO has generated spillover enthusiasm across the broader space sector, propelling the space tourism company's stock higher.

Other space-related stocks also gained strength, with Rocket Lab (RKLB) rising 5%. This marks a rebound for both Virgin Galactic and Rocket Lab after a period of significant volatility in the space sector over recent weeks.

Several recent positive developments have contributed to the upward price movement, forcing short sellers betting against the stock to cover their positions. The company plans to restart commercial suborbital human spaceflights later this year, following a successful test flight. Additionally, market chatter suggests some retail investors may have inadvertently bought the wrong stock due to ticker symbol confusion, with Virgin Galactic's SPCE being similar to the anticipated SPCX ticker for SpaceX, potentially adding buying pressure.

The stock had skyrocketed approximately 200% between May 20th and early June. The share price pulled back on Wednesday after the company completed a debt-for-equity swap, issuing new shares to repay debt, which diluted existing shareholders.

Additional Context

SpaceX, led by Elon Musk, has reignited capital market interest in the space industry, and its public offering this Friday is poised to be one of the largest IPOs in history.

Founded by British billionaire Sir Richard Branson, Virgin Galactic went public in 2019 via a merger with a special purpose acquisition company (SPAC).

Year-to-date, the stock is up roughly 68%, though its current price is a mere fraction of its all-time closing high of $920 reached in 2021.

The company's primary business involves selling seats for suborbital space tourism. It suspended all commercial operations in 2024 to focus resources on developing its next-generation spacecraft. Virgin Galactic currently targets a return to commercial human spaceflight in the fourth quarter of 2026.

Over the years, the company has repeatedly issued new shares, continuously diluting existing shareholder equity, and executed a reverse stock split in 2024.