Virgin Galactic falls after it prepares to sell $ 500 million in stock after Branson theft – .

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Virgin Galactic falls after it prepares to sell $ 500 million in stock after Branson theft – .


Virgin Galactic shares fell on Monday after the company asked to sell up to $ 500 million of common stock. This follows the commercial spaceflight company’s successful test flight with founder Sir Richard Branson.
Virgin Galactic, which trades under ticker SPCE, fell more than 11% after filing notice of its offer to sell shares with the Securities and Exchange Commission. Trading in Virgin Galactic was briefly halted on Monday morning due to volatility.

On Sunday, the company successfully completed its full crewed test flight in suborbital space, a major milestone in the race for commercial space and a step towards its commercial service goal in 2022.

The shares traded hands at $ 43.56, around 10:45 a.m. ET, after rising 7% in pre-market trading. The stock is up over 80% so far this year in anticipation of this progression towards the sales department.

“We view Branson’s success as a massive marketing stunt for Virgin Galactic that will be impossible for the public to ignore,” Ken Herbert, equity analyst at Canaccord Genuity, told clients. The company has a buy rating on the company, but has also set a target price of $ 35 on the stock, which is below its current level.

VSS Unity’s spacecraft launched above the New Mexico skies on Sunday, with two pilots guiding the vehicle carrying the billionaire founder and three Virgin Galactic employees. VSS Unity triggered its rocket motor and accelerated to more than three times the speed of sound while climbing to the edge of space.

“We see this as important on the way to the start of passenger flights, which we assume will happen in early 2022,” AB Bernstein analyst Douglas Harned told clients. The company has a market performance rating on Virgin Galactic.

Virgin Galactic’s VSS Unity is designed to accommodate up to six passengers with both pilots. The company has approximately 600 ticket reservations on future flights, sold at prices between $ 200,000 and $ 250,000 each. Although passenger ticket sales have yet to be announced, Bernstein expects them to sell for a higher price between $ 400,000 and $ 500,000.

Virgin Galactic also announced its partnership with raffle company Omaze to offer a two-seat chance on “one of Virgin Galactic’s first commercial space flights” early next year.

“The flight is symbolically important in boosting consumer confidence and the demand for space tourism,” Harned said. “A successful test flight by Blue Origin including founder Jeff Bezos, scheduled for July 20, should spark increased interest in the industry, which would benefit both companies. “

In 2004, Branson founded Virgin Galactic to transport private passengers into space. Branson was not supposed to fly on Sunday’s space flight, but after fellow billionaire Jeff Bezos announced he would be flying on his company’s Blue Origin first passenger flight on July 20, Virgin Galactic revamped his schedule – in the goal of flying Branson nine days before Bezos.
Launched before Bezos or Elon Musk, Sunday’s flight means Branson is the first of the billionaire space company’s founders to pilot his own spacecraft.

AB Bernstein said the theft’s success and subsequent ticket sales may well be a short-term upside catalyst for the title, but haven’t changed their long-term outlook. The company noted that it would not be short as it has experienced tremendous volatility due to the reaction of retail investors to the events.

– with reporting from CNBC’s Michael Sheetz and Michael Bloom.

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