Virgin Galactic stocks dip by 17% as firm plans to sell shares worth $500 million

Virgin Galactic Holdings has filed to sell up $500million in common stock after the company completed a successful spaceflight with founder Sir Richard Branson on July 11, 2021. Following the news the Virgin Galactic shares rose about 8% before markets opened in the United States on July 12, 2021, Monday. However, the shares dipped by 17% by the end of the day, after the announcement of sales. Branson and Virgin Group currently hold a 24% stake in the company.

The spaceflight company has 240 million shares outstanding from which 164.6 million are available as float (public trading). Based on Friday's closing price at $49.20, Branson’s company has filed a notice of stock sale offering with the Securities and Exchange Commission (SPEC). The stocks closed at $40.69 per share on Monday, after a surge of 7% in premarket.

Successful First spaceflight

Virgin Galactic successfully completed its first fully-crewed test flight on July 11, 2021, Sunday. The launch of the commercial spacecraft into suborbital space is considered to be a major leap in the private space tourism business. Sir Richard Branson reached the edge of space on the Virgin Galactic flight and referred to the trip as the “experience of a lifetime.” This space trip made Branson the first entrepreneur to travel to space on his own shuttle, pasting Jeff Bezos and Elon Musk.

Branson was accompanied by two pilots and three other company employees. Virgin Galactic expects to begin selling privatized space trips to customers from next year. According to Wall Street Journal, about 600 individuals are said to have pre-booked seats for a space tour. One to-and-fro trip is said to cost about $250,000. Branson intended to begin commercial space flights in 2007. The company managed to launch its first flight in 2014, however, the plane crashed due to technical difficulties. Nevertheless, the stock price skyrocketed after the announcement of the first flight this year.