Virgin Galactic (SPCE) shares fell sharply around 18% early Friday after the company announced plans to raise up to $400 million through the sale of common stock, putting it on track for its worst day of trading since over a year.
Key Points to Remember
- Virgin Galactic's share price fell about 18% in early trading Friday after seeking financing.
- The shares are on track for their largest one-day sale since January 2022.
- Space tourism company aims to raise $400 million through sale of common stock.
- Funds raised will be used to develop its fleet and infrastructure to expand its operations.
Space tourism is a capital-intensive business and the funds that Virgin Galactic plans to raise by selling common stock would be used to expand its fleet and its spacecraft infrastructure. The company said in a regulatory filing that the product could also be used for general purposes.
Representing approximately 27% of the company's market capitalization as of the end of Thursday, the new fundraising follows the completion of a $300 million fundraising under a previous deal dated August 4, 2022.
Virgin Galactic announced its first spaceflight last week commercial, scheduled for the end of June. This news boosted stocks, which are up about 25% year-to-date. The S&P 500 returned 14.1% over the same period./>
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Source: investopedia.com
