CNBC's Jim Cramer said that the rapid climb for Virgin Galactic shares may leave many traders burned and that the company isn't close to delivering the promise of space tourism. Virgin Galactic’s rally began two months ago but trading in the speculative space company has recently accelerated in a way that tops even the momentum behind Tesla.
Shares of Virgin Galactic shot up 23.3% in trading Wednesday to close at a new record high of $37.35, its highest ever finish and the stock’s single best day of trading. This follows a 21% jump on Friday and 5% surge on Tuesday, daily trading spikes that resemble the speculative run in Tesla two weeks ago.
The stock has more than tripled in the past three months, up 298% at the end of trading Wednesday.
Daily trading volume in Virgin Galactic has been pushing higher for the past week. Before Tuesday, an average day of trading saw 12 million Virgin Galactic shares change hands. But investors flooding into the space tourism company are pushing that average higher. Virgin Galactic’s trading volume hit 45.6 million shares on Friday, 104.1 million shares on Tuesday and 81.2 million shares on Wednesday.
Jon Najarian, co-founder of Market Rebellion and a CNBC contributor, put into context the increase in Virgin Galactic’s trading volume. He first began trading Virgin Galactic in December, saying there were about 12,500 call options on the stock per day. Najarian said that spiked to 38,000 calls per day in January — and then, last week, Virgin Galactic traded 175,000 calls per day.
“That’s bats--- crazy volume!” Najarian said.
Virgin Galactic has been trading publicly only for a few months. The stock debuted on the NYSE in late October, taken public through a merger with Chamath Palihapitiya’s venture Social Capital Hedosophia.
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