by Douglas Messier
Virgin Galactic filed paperwork with the Securities and Exchange Commission (SEC) to issue up to $1 billion in additional stock on Friday at the start of the long Memorial Day weekend. Friday is a traditional day to dump news you don’t want a lot of media coverage about; a long holiday weekend is especially useful for that purpose.
It would be the third infusion of cash in 19 months for the suborbital space company founded by Richard Branson. On Oct. 28, 2019, the company went public on the New York Stock Exchange (NYSE) following an $808 million merger with Social Capital Hedosophia. In August 2020, the company raised $460 million in a secondary stock offering.
This offering includes 2,666,667 warrants issued as part of the merger that have an exercise price of $11.50 per share. The stock is currently trading at $30.10. The warrants, which are similar to stock options, would raise a maximum of $30,666,670.50 to fund Virgin Galactic’s operations.
“In accordance with Rule 416 under the Securities Act, this registration statement shall be deemed to cover an indeterminate number of additional shares to be offered or issued from stock splits, stock dividends or similar transactions with respect to the shares being registered,” the filing said.
Since going public 19 months ago, Virgin Galactic has been burning through cash while generating little revenue. The company reported a net loss of $130 million for the first quarter of 2021. Space tourism flight are not scheduled to begin until early next year.
Virgin Galactic CEO Michael Colglazier has laid out an ambitious agenda for the company that includes hundreds of SpaceShipTwo suborbital flights being conducted from multiple spaceports around the world. Colglazier has forecast 200 suborbital flights and $1 billion in ticket and ancillary revenues per spaceport.
To achieve this goal, Virgin Galactic will need at least eight SpaceShipTwo vehicles and three WhiteKnightTwo carrier aircraft per spaceport. The company currently has only three spacecraft — one now undergoing flight tests, a second set to begin flight tests later this year, and a third in an advanced state of construction. Virgin Galactic has a single 13-year old WhiteKnightTwo with a second mother ship still in the design phase.