Virgin Galactic Shares Come Crashing Down: What's Fueling The Sell-Off?

Shares of Virgin Galactic Holdings, Inc. (NASDAQ:SPCE) are falling Tuesday. Here’s why the Richard Branson-founded aerospace tourism company’s stock is trending.

• Virgin Galactic stock is among today’s weakest performers. What’s pressuring SPCE stock?

What To Know: Virgin Galactic, which has remained unprofitable every quarter since going public six years ago, announced a capital realignment plan on Tuesday, aiming to reduce its debt by $152 million.

To help fund the capital realignment, the company will repurchase and retire approximately $355 million in aggregate principal amount of its existing 2.50% convertible senior notes due 2027 in privately negotiated agreements with certain holders.

The maturity of Virgin Galactic’s remaining debt will be extended to the end of 2028, which the company said better aligns with its planned timeline for commercial operations.

Virgin Galactic will also issue and sell for cash approximately $46 million of common stock and pre-funded warrants in a direct offering to help fund the repurchase. The company will also issue and sell for cash approximately $203 million aggregate principal amount of a new series of its 9.80% first lien notes due 2028.

Last quarter, the company brought in $365,000, a far cry from its peak in the second quarter of 2024, when it brought in $4.22 million. The company has failed to meet market expectations for revenue five quarters in a row, according to Benzinga Pro.

CEO Michael Colglazier said in November that Virgin Galactic is on track to start commercial operations at the end of 2026, but that a majority of current customers will fly in 2027 when the company’s flight rate capacity is increased.

Virgin Galactic had approximately $424 million of total cash, cash equivalents and marketable securities as of Sept. 20.

SPCE Price Action: Virgin Galactic shares were down 18.90%, trading at $3.69 at the time of publication on Tuesday, according to Benzinga Pro.

Read More:

• What’s Next for Virgin Galactic?

Image: courtesy of Virgin Galactic.