Yahoo Finance Virgin Galactic shares fall to earth day after Branson soars into space
Virgin Galactic (SPCE) shares crashed a day after founder Sir Richard Branson flew to the edge of space and back, as the company revealed plans to sell millions in stocks.
A company filing showed it entered into a distribution agency agreement with investment banks Credit Suisse (CS), Morgan Stanley (MS) and Goldman Sachs (GS) to sell up to $500m (£360m) of shares.
Shares in the company did a U-turn following the news, declining 12% after gaining over 20% in pre-market trade.
The move wiped off around $1bn from the company's market capitalisation and trading in Virgin Galactic was briefly halted on Monday morning due to volatility.
It will use the proceeds for corporate matters, such as working capital, general and administrative purposes and capital expenditures for manufacturing, development of its spaceship fleet and other infrastructure improvements.
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It comes after the company completed its first successful fully-crewed test flight into suborbital space, a major milestone in the commercial space race on Sunday.
The company's spacecraft, VSS Unity, launched above the skies of New Mexico, with two pilots guiding the vehicle carrying the billionaire founder Branson and three Virgin Galactic workers. VSS Unity fired its rocket engine and accelerated to faster than three times the speed of sound to reach the edge of space.
Virgin Galactic plans to conduct at least two further test flights of the spaceplane in the months ahead before beginning regular commercial operation in 2022.
Watch: Richard Branson’s successful Virgin Galactic launch
