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Virgin Galactic Slumps 14% On Share Sale Plan After Being Up 10% Premarket

Published 13/07/2021, 12:34 am
© Reuters

By Dhirendra Tripathi

Investing.com – Virgin Galactic (NYSE:SPCE) stock slumped over 14% in Monday’s trading as the company’s plans for a $500 million sale of new shares spooked traders.

The shares were up 10% premarket but gave up all those gains as the company looks to cash in on the successful launch Sunday of its first-ever full crew spaceflight that also included its founder Richard Branson.

Although the V.S.S. Unity had made space trips earlier as well, this was its first flight with six passengers, including Branson, ahead of a planned commercial launch next year. Two more test flights have to happen before that. This was the fourth so far.

According to The Wall Street Journal, the company has collected $80 million in deposits from sale of tickets for a space ride. Each ticket is going for anywhere between $200,000 and $250,000, according to various reports.

Those on the company’s wait list include Tesla (NASDAQ:TSLA) CEO Elon Musk, who otherwise has his own space flight ambitions, being pursued through his company SpaceX. 

The flight marks a milestone for the space tourism industry that is still in its infancy. Branson beat Amazon (NASDAQ:AMZN) founder Jeff Bezos in the race of billionaires to go into space. Bezos has flight aboard Blue Origin scheduled for July 20.

 

Latest comments

Knowing that he and other members of the board would have been sitting around the boardroom table prior to the flight discussing proceeding with this. And knowing there would have been many, many thousands of people, including Virgin staff and all their other business cohorts, would have been "in the know" and not to be buying in at this point. I find it all totally outrageous and a total slap in the face to all those who supported his dream and the company's success. These are the same people he will be relying on to use the services of Virgin Galactic in the future.
Millions of people around the world followed the story of Virgin Atlantic from the devastating crash and loss of life to the succesful flight on Sunday last.  Many tens of thousands of those people invested in the company as a show of support and in an effort to secure a small amount of security for themselves as the company was growing and succeeding.   As the share price gradually increased over the past few weeks/months in anticipation of a successful flight, they would have felt confident in their support. Instead, after the flight on Sunday, Branson and the management team decided to dump a half a billion shares on the market on Monday morning, notified to the world just as the US market opened. The predictable result was a total crash of the price as people panicked to save their losses. To say that I am totally disgusted and angry with the decision to dump this quantity of shares knowing full well what would happen immediately, is a total understatement and it makes me feel sick
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