Virgin Galactic stocks fall due to plans to sell up to $500 million in stocks Business and Economic News
After founder Richard Branson successfully flew into suborbital space on Sunday, Virgin Galactic applied for the sale of up to $500 million in stock.
After founder Richard Branson conducted a rocket-powered test flight, Virgin Galactic Holdings applied to sell up to $500 million in stock. The test flight won praise from Wall Street, calling it a “marketing coup.”
The success of an hour-long mission of more than 50 miles (80 kilometers) above the earth has pushed Virgin Galactic’s plan to begin offering tourist travel next year. But after Monday’s disclosure of a possible stock sale, the stock price recorded its biggest decline in nearly seven months, indicating that the company needs additional funds as it prepares for its commercial debut.
“Welcome to the dawn of the new space age,” Branson told guests on Sunday at the U.S. Spaceport building near the town of Truth or Aftermath, New Mexico.
Canaccord Genuity analyst Ken Herbert said in a research report that Branson’s achievement is a “mass marketing coup” for Virgin Galactic, and it is difficult for the public to ignore it. “The challenge for the company now will be to maintain momentum and develop a flight plan in 2022 to demonstrate a repeatable and increasing pace of commercial launches.”
Virgin Galactic plunged 17% to $40.69 at the close in New York, which was the biggest drop since December 14. As the company restarted its flight test plan, the stock price that had been volatile in recent weeks doubled as of July 9 this year.
Virgin Galactic plans to begin processing the backlog of approximately 600 confirmed customers in early 2022. The company said it would resume ticket sales after the test flight in the summer, and executives said the fare would be higher than the previous price of $250,000 per seat.
Will Whitehorn, the former president of Virgin Galactic who helped build the company, said the $300,000 price should be achievable.
“Now that it works, I think they will be able to sell it at a high price,” he said.
The suborbital journey opened a landmark month for the future of space tourism. Branson demonstrated Virgin Galactic’s 9 days before Amazon’s founder Jeff Bezos planned to fly on a rocket made by his space company Blue Origin. ability. Both companies envision businesses that cater to wealthy tourists who are willing to pay high prices for temporary weightlessness and unforgettable views of the earth and paradise.
The test flight of Virgin Galactic shows that this kind of travel that once belonged to science fiction is becoming more and more realistic.
Although in most cases only a few super-rich can use them, they will add a new dimension to the emerging industry of private aerospace companies that plan to sail to the International Space Station and new human outposts.
When Unity reached its highest altitude, Branson and his crew experienced a few minutes of weightlessness.
“So I looked out the window and the view was amazing,” Colin Bennett, an operations engineer, said afterwards. “It’s very Zen; it’s also very quiet there.”
Branson founded Virgin Galactic in 2004, and he said that the memory of seeing the Earth from space will remain with him.
“I can never be fair,” he said. “The beauty is beyond description.”
(Update the sharing in the fifth paragraph)
– With the assistance of Blaise Robinson, Ksenia Galouchko, Christopher Jasper, Esha Dey and Tony Robinson.