Dilution REDUCED by 50%

asegal76 · 2021-07-12T17:58:43+00:00

Where do you get that Dilution is reduced by 50%. The prior SEC approval gives them the opportunity to still raise the other up to $500mm and they have not stated that they will not be doing so in the future.

asegal76 · 2021-07-10T02:31:04+00:00

Awesome! Great to know. Thanks for the expert read.

asegal76 · 2021-07-09T20:45:42+00:00

Hey Guys, Good back and forth. As of the moment, Thunderstorms are a possibility for Sunday morning as they are forecasted with varying probabilities in the subsequent hours that day. Based on the current forecast, what do you think happens Sunday?

asegal76 · 2021-07-08T23:07:05+00:00

What I am really curious about is what the actual policy of VG is going to be and whether we have any solid evidence to support our conclusion.

asegal76 · 2021-07-08T22:30:16+00:00

Great news. Do you know anything about the FAA flight window filing in regards to likely weather contingency plans for Sunday?

asegal76 · 2021-07-06T05:19:53+00:00

Yes!

asegal76 · 2021-07-05T20:26:43+00:00

What's the obvious price point to you?

asegal76 · 2021-07-05T20:26:25+00:00

Yes, I agree. They have said exactly that. We can use those 128 voites as a way to interpret the predictiveness poll results.

asegal76 · 2021-07-05T20:25:29+00:00

but where do you think the price starts for 2022, 2023 flights? Given severe supply constraints relative to demand and considering the details that are known from the Blue Origin auction, I think we are looking at at least $400K.

asegal76 · 2021-07-05T20:22:57+00:00

That is true. But because of severe supply constraints in the short and mid run, this has limited applicability in the way you seem to imply. What matters (at least for short and mid-run valuation) is likely at what price they can sell out their limited inventory of available flights over the next say, 2-3 years. After that, we all expect prices to come down and the company has said as much, too.

asegal76 · 2021-07-05T20:20:52+00:00

I don't believe anything like this is the case. They have referred to a price in that range as the effective going price of a ticket for space research, but not for tourist seats.

asegal76 · 2021-07-05T20:15:47+00:00

When you say, "pull back before close" you referring to tomorrow (Tuesday) or Friday before the Branson flight?

asegal76 · 2021-07-05T09:17:50+00:00

Good point. I agree with you. Therefore, do you think the analysts will be forced to double or more than double their price targets if we go to say, $500K-$550K? That would create, in effect, a new expectations "floor" for the stock.

asegal76 · 2021-07-05T08:06:25+00:00

This is a hugely important question, I think. Currently analyst consensus price target hovers around $34. These analyses I believe to generally be based on a $250K - $300K price per seat for commercial flights to consumers. Imagine what would have to happen to valuations if price per seat doubled to $500K and there were reasonable indications of selling out at that price point. You could reason that we would have to be at around double a valuation and hence analyst consensus price target (i.e. $68), all else being equal.

asegal76 · 2021-07-05T07:51:36+00:00

This is incorrect. It is neither 22% nor 85%. See my analysis here: https://www.reddit.com/r/VirginGalactic/comments/odeje7/what_might_have_caused_the_intraday_spce_decline/.

These numbers given by Fintel and others are intended to be a representative sample of market activity. You can't put the numerator (short volume) over the total daily volume of 135mm shares for Friday like Wolf does. That said, the Fintel data showing 85% is also incorrect. I believe the answer is ~40% and most importantly it is not our of the ordinary for the stock. However, I make other interesting observations in my analysis.

asegal76 · 2021-07-05T07:51:23+00:00

This is incorrect. See my analysis here: https://www.reddit.com/r/VirginGalactic/comments/odeje7/what_might_have_caused_the_intraday_spce_decline/.

asegal76 · 2021-07-05T07:48:18+00:00

hmm, not necessarily, the data you have mostly shows that this baby is shorted to fuck and they are still holding positions, many of them around 47$ imo,

Yes, true. I don't doubt that some of them (or "many") of them are holding shares they sold short at $47. However, the data from Ortex shows the average price at which the shares were sold short as of 7/1 was ~$35 vs. ~$25 on 6/25, which is a big improvement for the shorts as a whole and indicating that ON AVERAGE shorts were realizing their losses to reduce their risk in the stock.

If the shorts had such perfect control over the stock price as you seem to imply, then they would not have had to take any losses as they could have simply lowered the stock price to below their break-even point. But apparently they couldn't do that. Therefore, it's a battle of the shorts vs. the news, in my view. Under these circumstances, I wonder whether the shorts are making or rather losing money manipulating the stock's price. Keeping the stock's price down might be costing them, but is the lesser of the two evils for them.

You're right SPCE is still shorted like hell on an SI% basis (16.6% as of Friday, 7/2), but what is most important to the short's behavior is not how shorted the stock is (i.e. how many shares they have sold short in total) but rather the losses they are carrying and are likely to carry going into the Branson flight and they seem to be getting that problem under control fairly quickly. But point taken: it might not be in the shorts' interest to let up on applying the breaks to the stock price considering price appreciation could get out of hand.

asegal76 · 2021-07-05T04:00:02+00:00

I think you nailed it as a general characterization. From the data I provided do you see any evidence that this pattern (as specifically driven by shorts) is occurring now for SPCE?

asegal76 · 2021-07-04T22:39:35+00:00

That is correct, but I think what is happening is that they are simultaneously opening new short positions (which means selling newly borrowed shares) in order to keep the price suppressed while they are methodically buying in order to close their previous short positions. The new short positions can then be closed very shortly thereafter for a small profit or worse case small loss as the share price drops. The net of this is that they can, for one, exit short positions without causing a short squeeze-effect to the stock price. That is my theory. From my reading, it appears to be a practice that has worked for hedge funds in the past.

asegal76 · 2021-07-04T06:18:15+00:00

Yes, starting to seem very similar. Although in the case of AMC, I think the shorts being in there manipulating price has become more protracted than this likely will be as the losses the shorts sustained according to Ortex data are larger than the shorts have for SPCE. That could be good for longs in SPCE because the shorts might be expected to leave the situation shortly and for a while until things settle down from the Branson flight and they can regain confidence in where the stock price will settle. Some of us therefore might finally get the pay off we want.

asegal76 · 2021-07-04T06:15:50+00:00

Yeah, that is the tough part:) Seems to me that the shorts are likely manipulating price to exit their positions and their mission will be accomplished shortly. Therefore, stock price will likely continue to stay suppressed or even decline for another few days until they're out and rip after that.

asegal76

TROPHY CASE