Virgin Galactic founder Richard Branson (file photo). Photograph:( AFP )
Virgin Galactic’s shares fall by around 14% after the announcement of its plans to sell up to $500m worth stock in a fundraising exercise. After Richard Branson’s flight to the edge of space, the share price had risen by about 9% in pre-market trading on Monday
After Richard Branson’s flight to the edge of space, Virgin Galactic’s shares have fallen back to earth after the firm’s announcement of its plans to sell up to $500m worth stock in a fundraising exercise.
The decision comes just a day after the company’s founder completed the memorable flight.
Although the company’s share price had risen by about 9% in pre-market trading on Monday, it changed course and plummeted by around 14% after the announcement, according to a The Guardian report.
In a filing to the US Securities and Exchange Commission, the company revealed it entered into a distribution agency agreement with the Wall Street investment banks Credit Suisse, Morgan Stanley and Goldman Sachs.
The company looks to use the proceeds of the sale 'for general corporate purposes, including working capital, general and administrative matters and capital expenditures for its manufacturing capabilities, development of its spaceship fleet and other infrastructure improvements'.
Calling it an 'experience of a lifetime', Richard Branson said through a live feed, "Congratulations to all our wonderful team at Virgin Galactic for 17 years of hard work to get us this far."
Branson, an entrepreneur known for his range of businesses and his adventurer spirit, said, "As a child, I wanted to go to space". He had been working on his dream since 2004 when he founded Virgin Galactic. However, he feared an end to that dream when an internal issue caused the death of a pilot of a test flight.
(With inputs from agencies)