Virgin Galactic Shares Fall Following Branson’s Trip To Space
Virgin Galactic shares plummeted after founder Sir Richard Branson’s space flight, as the company unveiled plans to sell millions in stocks.
On July 11, Virgin Galactic founder Sir Richard Branson, flew high above New Mexico, US, in a rocket planet that had taken the company almost two decades to develop. The trip, which lasted just over an hour, was labelled as an experience of a lifetime by the Virgin Galactic founder.
A company filing showed that Virgin Galactic made a distribution agreement with investment banks Morgan Stanley, Credit Suisse, and Goldman Sachs to sell up to $500 million of shares. In light of this news, company shares did a U-turn, dropping 12% after gaining approximately 20% in pre-market trade.
The agreement saw £1 billion wiped from the company’s market capitalisation. Trading in Virgin Galactic was also temporarily halted on Monday morning due to volatility.
Virgin Galactic plans to use the proceeds from the sale for corporate matters, including working capital, capital expenditures for manufacturing, general and administrative purposes, and the development of its spacecraft fleet. Following Sir Richard Branson’s flight to space, the company plans to conduct at least two more test flights of its space vehicles in the coming months. By 2022, the Virgin Galactic plans to begin its regular commercial operation, enabling members of the public to fly to space.
