Richard Branson’s space tourism company Virgin Galactic (SPCE) reported in a filing late yesterday (June 22) that it is seeking to raise $400 million through the sale of common stock, a sign that the company may be running low on cash again.
The fundraising notice, which came just days before Virgin Galactic is expected to fly its first paying customers into suborbital space, caused the company’s shares to plunge more than 18 percent in today’s morning trading.
Proceeds from the new stock issuance will go to the development of Virgin Galactic’s “spaceship fleet and infrastructure to scale its commercial operations,” according to yesterday’s filing.
Virgin Galactic provides travelers with a 90-minute flight that climbs to roughly 55 miles above sea level using a spaceplane called VSS Unity. The main appeal of the flight is that passengers enjoy a view of Earth from space at the top of the plane’s climb and experience a few minutes of weightlessness on the way back down.
The company said on June 15 that its first commercial flight will take off between June 27 and June 30, with a second flight planned for August. It’s been almost two years since Branson flew to space himself in Virgin Galactic’s first crewed test flight.
The company said it has more than 800 customers on a waitlist, representing hundreds of millions of dollars in potential revenue. (The suborbital trip costs $450,000 per person.) But it’s burning through cash quickly. In the first three months of 2023, Virgin Galactic lost $160 million on less than $400,000 of revenue.
Virgin Galactic’s stock has lost half its value since going public in March of 2018 and is down more than 90 percent from its peak in June of 2021.
