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Virgin Galactic Files To Sell Up to $500 Million of Stock

The shelf filing comes a day after Richard Branson's historic space flight.

Video source: YouTube, Virgin Galactic

Virgin Galactic Holdings filed to sell up to $500 million in common stock to investors Monday morning, just a day after its billionaire founder Richard Branson completed a historic flight to the edge of space and back.

In its shelf registration with the US Securities and Exchange Commission, Virgin Galactic named Credit Suisse, Morgan Stanley and Goldman Sachs as agents for the deal.

Based on Friday’s closing price of $49.20, Virgin Galactic’s total offering would be about 10.2 million shares.

In its regulatory filing, the 17-year-old space tourism company said it intended to use the proceeds of the sale “for general corporate purposes, including working capital, general and administrative matters and capital expenditures for its manufacturing capabilities, development of its spaceship fleet and other infrastructure improvements.”

CNBC noted that trading in Virgin Galactic was briefly halted following news of the stock sale due to volatility. 

Its shares went on to fall 17% to $40.69 — the company’s worst performance since March 2020. Virgin Galactic’s market value dipped below $10 billion, but its share price is still more than double what it was a year ago, according to The Wall Street Journal

On Sunday, Virgin Galactic’s VSS Unity spacecraft completed its first fully crewed test flight into suborbital space with Branson on board.

Two more test flights are planned later this year before Virgin Galactic launches service to paying customers in 2022

According to CNBC, the company has about 600 reservations for tickets on future commercial flights, sold at prices between $200,000 and $250,000 apiece.

Virgin Galactic has not yet formally announced ticket sales, but analysts told the media outlet they expect it will cost somewhere between $400,000 to $500,000 to book a seat to space. 

Jeff Bezos’s Blue Origin and Elon Musk’s SpaceX are also working to commercialize space travel, an industry that investment bank UBS estimates could be a $3 billion annual market by 2030. 

Bezos, newly retired as Inc’s chief executive officer, is set to blast off on July 20 on the first human flight on a Blue Origin spacecraft.

SpaceX, meanwhile, is scheduled to launch the first all-civilian crew to space, bankrolled by tech entrepreneur Jared Isaacman, by the end of this year. 

Following Sunday’s mission, Virgin Galactic announced it is partnering with Omaze, a charity fundraising platform, to give away two seats on one of the first commercial spaceflights early next year.

The winners of the sweepstakes — a fundraiser for the nonprofit Space for Humanity — will also receive a personal tour of Spaceport America in New Mexico from Branson.


Source: Equities News

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