Markets: Virgin Galactic Files To Raise $500M, Shares Dive
Just after Virgin Galactic, the aerospace company of fun-having entrepreneur Richard Branson, made space tourism history by sending Branson along with a group of acquaintances to the edges of outer space, the company has already sought to capitalize on the generated fanfare by selling stock on the public markets.
- Barely a day after its successful space trip, the publicly traded Virgin Galactic filed a notice with the SEC to sell up to $500 million of common stock to fund its operations. It seems that investors weren’t happy with that speedy cash grab, as Virgin Galactic stock fell 11% during trading on Monday after the sale was announced.
- Despite minimal revenues, Virgin Galactic has ridden the waves of fanfare to have a current market cap of $10bn. That market cap is up 10x from the company’s debut through a SPAC merger in 2019.
- With Branson and co having a successful trip to suborbital space, it’s validated that Virgin Galactic has the technical chops to open up a new market of space tourism. The company is selling tickets for the exact kind of trip Branson took for $250k each, for which 600 persons have reserved. That fare could rise even further if demand gets bigger.
|Branson and Co.|
- Credit Suisse, Morgan Stanley, and Goldman Sachs are the banks arranging Galactic’s $500mn stock sale. Given the current fanfare surrounding the company, it could get that amount without a hitch and even more if it feels.
- Virgin Galactic is trading at around $42 a share. It’s up nearly 80% year-over-year.