SPCE: Virgin Galactic Stock Drops 18% as Space Company Seeks to Sell $400M Worth of SharesThe new fundraising haul comes just after Virgin picked up $300M from a successful “at the market” offering.
- Virgin Galactic filed to offload a $400M chunk of its shares in a bid to raise fresh capital to fund its cash-burning development of spacecraft fleets and infrastructure. Virgin Galactic stock (ticker: SPCE) quickly came back to earth with an 18% fall to a Friday close of $4.34 a share.
- The sale of common shares follows a just-completed $300M “at the market” offering for general purposes such as commercial operations and administrative expenses. The offering news capped an otherwise stellar performance for Virgin after it announced its Galactic 01 ship will fly between June 17 and June 30.
- Sir Richard Branson, company founder, isn’t having an easy time. After Virgin Galactic stock peaked at a record of over $50 in mid-2021, shares have erased 92% of their valuation, giving the space firm a market cap of just over $1.2bn.
Francois Olwage / Unsplash
SPCE: Virgin Galactic Stock Rockets 17% on First Commercial Flight into SpaceGalactic 01 is scheduled for liftoff between June 27 and June 30 and it will carry three crew members.
- Rocket ships are back but not the ones that can launch your portfolio to the moon. Unless you bet heavily on Virgin Galactic (ticker: SPCE) before it unveiled it’s about to shoot some people to space. The company revealed on Thursday its Galactic 01 is taking flight with three crew members between June 27 and June 30.
- The announcement boosted Virgin Galactic’s stock by 17% to close Friday at $4.73 a share, giving the company a $1.3bn valuation. Earlier during the session, investor enthusiasm shot the share price more to an upside of more than 50%. For the year, the stock is up roughly 35%.
- It took a while for the company, founded by Sir Richard Branson, to aim for the skies. High hopes for star-studded flights had lifted shares to more than $50 in July 2021. Technical hurdles, however, have weighed on Virgin Galactic’s plans to defy gravity.
Josh Withers / Unsplash
Bored of sitting on the runwayVirgin Galactic investors have been waiting longer for takeoff than anyone who tried to fly out of LaGuardia on Memorial Day, and they’re starting to get testy.
- Shares in Richard Branson’s space baby plunged over 9% in extended trading on Thursday to erase much of this week’s 10% gain and take its YTD losses to 46%. The drop came after it reported a net loss of $111m for Q2, missing estimates and 18% more than $94m this time last year, on revenues that declined 36% and missed expectations at $357k.
- The real kicker was another delay to its commercial space service. Virgin Galactic now sees the first launch happening in Q2 of 2023 after first promising takeoff in Q3 of this year, then Q4, and so on and so on. CEO Michael Colglazier said the delays were down to supply-chain disruptions and labor constraints.
- Virgin is also looking to sell more stock according to an SEC filing where the brand revealed it’s working with a few big banks to raise money for “general corporate purposes”. It points to dwindling cash reserves for the company, which will certainly need a stockpile of some kind to fund its deal with Boeing’s Aurora to build two new motherships.
Brent Cox / Unsplash
SPCE gets weighed down by delaysIt’s been a while since Virgin Galactic enjoyed a lift-off, either stock or product wise, and investors aren’t holding their breath after Q1 earnings.
- Shares took a rocket-ride into the red, sinking 9% in Thursday intraday trading and sinking another 4% after hours despite the brand reporting a semi-impressive balance sheet, with cash and equivalents of $1.2bn.
- On the plus side, ticket reservations are holding strong with 800 counted in Q1, but when will people get to use those tickets? Virgin once again delayed its commercial space flight service to Q1 next year, citing labor constraints and supply chain concerns.
- It’s still trying to avoid a black-hole of losses, despite the robust balance sheet its boasting. Net earnings losses came in at $93m, less than last year but still leaving a mark in the bears’ column. Virgin needs time to turn things around, but will investors give it to them?
Ad Astra earningsVirgin Galactic’s Q4 earnings launch light a fire under its stock price on hopes that its spaceflights are done with adversity and are heading for the stars.
- Virgin lifted 10% in Wednesday morning trading after reporting a narrower than expected loss of $0.31 per share, even as revenues of $141k came in less than half of the $330k that analysts expected – though those metrics aren’t such a big deal for a company still in the pre-sales stage.
- The big news is that it claims it will indeed be flying people to space this year, as promised. Its route to a commercial space service has been filled with twists and turns, having sent the stock tumbling when it delayed operations last year – but apparently it will still be taking passengers to the edge of space in Q4 of this year.
- Its cash position has been improving, and the pioneering company ended the quarter with $931m in cash (excluding the $425m it raised last month), up from $679m a year ago – part of that will be used to ramp up production for its Delta spaceships as it reopens ticket sales for its trips to the edge of the atmosphere.
Virgin Galactic loses a CommanderChamath Palihapitiya, who helped take Virgin Galactic public, has decided to devote his attention elsewhere as the company experiences ongoing setbacks.
- Shares sank nearly 7% on Friday following news that Chairman Chamath Palihapitiya will be stepping down from Virgin’s board of directors effective immediately.
- His SPAC took the space firm public in 2019, but many have lost faith in the company in the last year as the stock has plunged over 80% on the back of a series of delays and technical concerns.
- It comes after Palihapitiya sold his entire personal stake in Virgin in March of last year for $211m. He said it was to make room to “keep investing at scale”, but he’s never sold his stake in any other SPAC he’s helped launch. Will investors follow suit and dump the stock?
Christopher Michel / Flickr
Pay now, launch laterAfter months on the ground for both its stock and its spaceflights, Virgin Galactic finally opens its ticket sales – and with prices starting at $450k, it’s enough to make anyone see stars.
- Virgin Galactic is finally opening ticket sales to the public, asking for a $150k deposit to secure a seat to space. It comes nearly a full decade from the initial ticketing round, and while nobody on the waitlist has made it to space yet, they’ve sure been on a wild ride.
- It had to delay the launch of its commercial spaceflights to the end of 2022 back in August bc its spacecrafts apparently needed a full refurb – giving rivals like Bezos’ Blue Origin time to race ahead.
- Prices shot for the moon and flew 32% on Tuesday to hit a one month high – though the stock is still hovering around its lowest levels since March 2020, having been decimated by bad publicity and delayed scheduling in the last eight months.
Virgin gets pushed into reentryInvestors are packing their bags after Virgin Galactic says it’s adding a hangar full of debt to its already heavy load.
- Shares returned to Earth by 18% on Thursday, hitting their lowest price since March 2020 when the pandemic was in full swing.
- It’s raising up to $500m in debt, $425m of which will be through 2027 convertible senior notes, and will use it to “accelerate the development of its spacecraft fleet”.
- Said spacecraft fleet was due to start flying customers in 2020, but a series of setbacks means commercial flights won’t be taking off until at least late 2022.
Bezos is all business, and Branson isn't keeping upJeff Bezos is getting busy, announcing plans to launch an entire business park in space, while Branson’s space travel baby sits grounded for a year.
Billionaire space exploration rival Blue Origin is making some impressive headway on its journey to space domination, having just unveiled plans to launch a commercial space station in low-orbit in the second half of this decade. The news comes as Virgin Galactic trades at its lowest levels since May after delaying any future space travel to 2022, making people wonder if Branson is slipping behind.
It’s not just Blue Origin to contend with either – Elon Musk’s SpaceX has just swiped a $2.9 billion contract from NASA, and is operating in a league of its own.
Branson’s staff are taking off for BezosA former Virgin Galactic flight test director has switched teams, joining Blue Origin.
Mark "Forger" Stucky, who until recently was a flight test director at Virgin Galactic, is cheering on another team after taking a job with key competitor Jeff Bezos’ space Blue Origin. Stucky was the director that piloted the first flight on Virgin’s SpaceShipTwo in 2018, but says he was fired earlier this year – not long after Branson’s historic flight into orbit. Stucky wrote at the time:
I'll leave it to Virgin Galactic to explain the reason for my termination as they never explained it to me.
Virgin Galactic is trading at its lowest levels since mid-May after delaying its next commercial flight to the end of 2022.
Illustration by TradingView
Is Virgin Galactic losing the market?After a 17% loss on Friday, Virgin stumbles another 1.45% on Monday as inventors react to a UBS downgrade that sees the stock falling another 25%.
After a quiet few months dealing with an FAA investigation, Virgin Galactic further delayed the beginning of its commercial space tourism service to the fourth quarter of 2022 on Friday amid a reorganization of its development and test flight schedule. Investors were less than pleased, especially as Musk’s SpaceX and Bezos’s Blue Origin continue to hit milestones, and prices went into freefall to lose nearly 17%. The stock failed to catch a parachute on the way down and lost a further 1.45% on Monday, prompted by a UBS downgrade that advised investors to sell the stock. Analyst Myles Walton has joined the bears, changing his rating from Neutral to Sell and seeing the stock drop another 25% as it continues to feel the pressure of flight delays. The analyst gave Virgin a one year price target of $15, down from its $45 target three months ago.
Virgin Galactic is down 22% for the month so far, after spending the last three consecutive months in the red. Prices closed Monday at $19.72, their lowest price since mid-May.
Virgin stock goes into free fall after further delaysVirgin Galactic stock falls back down to earth with no parachute in sight, seeing a drop of 11% in one hour after the space exploration company delayed its next commercial space flight to the fourth quarter of 2022.
After a quiet few months dealing with an FAA investigation, Virgin Galactic has further delayed the beginning of its commercial space tourism service to the fourth quarter of 2022 as opposed to the third, amid a reorganization of its development and test flight schedule. The company said:
Virgin Galactic has been performing routine tests and analyses to update its material properties database. One of these recent laboratory-based tests flagged a possible reduction in the strength margins of certain materials used to modify specific joints, and this requires further physical inspection.
Prices fell 11% in one hour, and continued to free fall on after hours trading after closing the day at $24.06.
Chris Nguyen / Unsplash
Can Virgin keep up?Virgin Galactic has been flying under the radar since its Federal Aviation Administration (FAA) investigation forced the company to delay its next space mission. The probe into Richard Branson’s flight mishap came back free and clear, but there hasn't been any news out of the company as to when we can expect its next trip sub-orbital. The same can't be said for its competitors, and on Wednesday, Jeff Bezos’ Blue Origin will launch its second crewed rocket to the edge of space – complete with famed Star Trek actor William Shatner as a guest.
Branson better get going if he hopes to keep his lead in the billionaire space race.
Virgin Galactic grinds back down to earthVirgin Galactic stock flew over 12% on Thursday on news that the Federal Aviation Administration (FAA) had cleared the company for all future flights. The gains didn't last long though, after investors came back down to earth and realized that there are still a few obstacles in the way to success: including uncertainty over when the next space flight will actually be, worry over whether tickets will sell with their new $450,000 price tag, and growing competition in the industry.
NASA / Unsplash
Virgin gets the go-aheadVirgin Galactic stock jumped up 10% in after-hours trading on Wednesday after the space tourism company got the all-clear from the FAA following its investigation into a flight mishap. Richard Branson’s adventure into space has been surrounded by controversy since a little yellow light was spotted in the playback video, attracting the attention of the FAA, which immediately grounded all Virgin space flights pending the outcome. After weeks of waiting and a delayed space mission, the space travel company has finally been given permission to return to the skies. The regulator said:
The investigation found the Virgin Galactic SpaceShipTwo vehicle deviated from its assigned airspace on its descent from space. Virgin Galactic failed to communicate the deviation as required.
Virgin has sincen made changes to its communication systems during spaceflights, and has changed its calculations to avoid the mishap happening again.
Virgin Galactic shakes up its staffVirgin Galactic makes a new hire, welcoming Aparna Chitale as its new Chief People Officer.
Aparna Chitale is moving over from Disney (DIS) to join Virgin Galactic to be the company’s new Chief People Officer as of the end of September.
Land Rover MENA / Wikimedia Commons
Analysts send Virgin rocketing upVirgin Galactic sees its biggest daily gain since August, lifting nearly 8% as analysts reiterate their confidence in the stock.
Space analysts at both Jefferies and Cowen have reiterated their bullish outlook on Virgin Galactic – the faith was well received, and prices lifted nearly 8% on Friday, its biggest daily gain since the end of August. Despite both lowering their price targets on Virgin to around the $30 mark, both sets of analysts think any current setbacks (an FAA investigation and space mission delays come to mind), the company is set for long-term success and is still seen as an “important leader in the commercial space flight industry”.
Prices ended Friday at $26.42, their highest closing price since August 31.
Space jam: New competition heads into orbitElon Musk’s SpaceX beats Virgin to the punch, launching the first all-civilian commercial space mission on Wednesday.
Elon Musk and his pioneering space exploration company, SpaceX, have gone where no space company has gone before and taken a billionaire and three normies out into the Earth’s orbit in the industry’s first all-civilian mission. The Inspiration4 mission will spend three days in orbit, and will take its guests well above Virgin’s 50-mile maximum to 360 miles above Earth.
While the competition heats up, Virgin continues to be brought down by its flight mishap investigation. Though the FAA hasn’t yet concluded its probe, Virgin Galactic’s reputation has taken a definite hit, and Bank of America has called its failure to disclose the mishap a “culture red flag”. Analysts have already assigned the stock an underperform rating, saying:
Point blank, in our view, it is unacceptable to have an event during a flight that, per FAA regulations, is considered a mishap and then claim that the mission was a full success. The old adage, it's easier to ask for forgiveness than permission, generally is a poor strategy in aviation.
Can Virgin keep up?
Official SpaceX Photos / flickr
Virgin flags yet another a delayA component defect in the flight control system forces Virgin Galactic to delay its next space mission.
Despite its insistence that its next commercial space mission would take place within the month despite the ongoing FAA investigation, Virgin Galactic has been forced to delay its upcoming commercial research mission with the Italian Air Force to mid-October at the earliest.
"Unity 23" was to have been the 23rd test flight and first ever commercial mission for Virgin's VSS Unity spaceplane. However, during preparation for the Unity 23 test flight, a third-party supplier flagged a potential manufacturing defect in a component of the flight control actuation system that they supply to Virgin Galactic. At this point, it is not yet known whether the defect is present in the Company’s vehicles and what, if any, repair work may be needed.
Out of an abundance of caution, and in line with Virgin Galactic’s established safety procedures, the Company is in the process of conducting inspections in partnership with the vendor. This issue is unrelated to the Unity 22 flight or the current FAA matter, which is focused on air traffic control clearance and communications.
said Virgin Galactic on 10 September.
The news is unlikely to reassure investors, and stock dropped 2.02% on Friday and a further 3% in Monday morning trading.
Mauricio Artieda / Unsplash
Virgin is undeterred by the FAAVirgin Galactic is unfazed by being grounded by the FAA, and still plans to launch its first commercial mission within the next month.
The Federal Aviation Administration grounded all Virgin Galactic flights last week after some potentially damaging details emerged about Richard Branson’s historic journey into orbit. Virgin is undeterred though, and plans continue with its first commercial mission within a month. The company said:
While incidents like these are headline risks and could potentially alter timelines for future flights, SPCE seems hopeful this issue will be resolved in a timely manner, allowing it to continue with its next flight (Unity 23) in late Sept/early Oct 2.