By
Godfrey Benjamin
August 10th, 2023
Virgin Galactic is planning to raise an additional $500 million in debt for reasons unclear. However, the news had a negative impact on the SPCE stock.
On Thursday, January 13, the stock of Virgin Galactic Holdings Inc (NYSE: SPCE) tanked 18.92% as the company announced its plan to raise an additional $500 million in debt. SPCE shares ended trading at $10.03 on Thursday. In its official statement, the company noted:
“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”.
Virgin Galactic shall be raising $425 million from the sale of 2027 convertible senior notes via a private offering. It will also provide another $75 million option to the buyers.
Virgin Galactic, owned by sir Richard Branson, went public via a special purpose acquisition company (SPAC) back in October 2019. Back then Virgin Galactic had said that it would be flying sutomers in 2020.
However, the company has reported multiple delays in its spacecraft testing and development. Virgin Galactic has also pushed back its commercial services to later this year at the earliest.
A Look at the Virgin Galactic (SPCE) Stock Performance
The SPCE stock has remained extremely volatile through its history of the last three years. The SPCE stock started gaining momentum after the March 2020 as the broader equity market was rallying.
Last year, the stock price reached to its all-time high levels of $55 twice, first during Feb 2021 and later during June 2021. since then, the price has been constantly dropping and has eroded more than 80% in its valuations.
Back in October 2021, Viegin Galactic announced that it will be delaying its commercial space flights to Q4 2022. Back then, Michael Colglazier, Chief Executive Officer of Virgin Galactic said:
“Our decisions are driven by detailed and thorough analysis, and we fly based on the most accurate and comprehensive data available. Virgin Galactic vehicles are designed with significant margins for safety, providing layers of protection that far exceed loads experienced and expected to occur on our flights. The re-sequencing of our enhancement period and the Unity 23 flight underscores our safety-first procedures, provides the most efficient path to commercial service, and is the right approach for our business and our customers. We are deeply appreciative of the Italian Air Force Research Mission and grateful for their continued partnership with us in this test flight program”.
Read more business news on Coinspeaker.