Virgin Galactic sinks 17% after the space tourism company announces plan to raise up to $500 million in debt
Virgin Galacticshares fell 17% on Thursday after the company outlined plans to fundraise through debt.
- The stock was pressured by dilution concerns as the space tourism company's bonds can be converted to equity.
Virgin Galactic shares tumbled Thursday after the space tourism company outlined plans to raise up to $500 million in debt, driving the stock price down even further early in the 2022 trading year.
The company plans private offerings of $425 million in convertible senior notes that will mature in 2027, and an additional $75 million in notes is expected to be granted to the buyers, it said in a statement.
Stock in the company fell as much as 17% to $10.22, hurt by fears of dilution as the notes can be converted to shares. The stock traded around its lowest since March 2020 and was moving toward a loss of 24% so far this year.
"The Company intends to use the net proceeds from the offering to fund working capital, general and administrative matters and capital expenditures to accelerate the development of its spacecraft fleet in order to facilitate high-volume commercial service," Virgin Galactic said.
Investors are awaiting the company's launch of commercial service in 2022, with its VSS Unity spacecraft expected to fly once per month starting later this year. Its next-generation spacecraft, the VSS Imagine, is slated to begin test flights in early 2023.
Virgin Galactic's founder
- Akasa Air takes to the skies, flagged off by Civil aviation minister
- As FIIs come back, India's forex reserves rise by $2.4 bn
- Markets to keep a close watch on US and Indian inflation data
- Demand for tablets drops as online schooling ends
- Reliance Industries will be hosting its 45th AGM this month — all your need to know