Virgin Galactic (NYSE:SPCE) shares tumbled Friday after the space tourism company said it raised $300 million through a common stock offer. Virgin Galactic hopes to raise another $400 million as it looks to expand and improve its spacecraft fleet.
As part of the filing with the Securities and Exchange Commission, Virgin Galactic said it intends to use any cash proceeds it receives from stock sale for development of its spaceship fleet and infrastructure to scale its commercial operations, and for general corporate purposes, including working capital and general and administrative matters.
Virgin Galactic has also announced that it will commence commercial flights at the end of June which would be a critical milestone achievement for the spaceflight company. “By announcing the start of commercial spaceline operations and setting a start date of June 27,” said the company’s news release, “Virgin Galactic is not only a step closer to seeing real revenue growth, but the firm has also reduced immense uncertainty about the firm’s business operations. While Virgin Galactic is expected to remain free cash flow negative for the foreseeable future, the commencement of operations is a major positive signal to investors that offering spaceflights is a commercially promising proposition.”
SPCE shares came to earth 87 cents, or 16.5%, to $4.45.
