Virgin Galactic Files for Shareholders to Sell 113 Million Shares

Shares of Virgin Galactic falls after the space company says shareholders may sell nearly 113 million shares.
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Shares of Virgin Galactic (SPCE) - Get Report fell sharply Friday after the space company founded and partly-owned by Richard Branson said in a regulatory filing that shareholders may sell up to 112,964,840 shares.

“We are registering the shares for resale pursuant to such stockholders’ registration rights,” Virgin said in the filing with the Securities and Exchange Commission.

“Subject to any contractual restrictions on them selling the shares of our common stock they hold, the selling stockholders may offer, sell or distribute all or a portion of their shares of our common stock publicly or through private transactions at prevailing market prices or at negotiated prices.” 

Virgin Galactic won’t receive any of the proceeds from the offering.

Las Cruces, N.M.-based Virgin Galactic recently traded at $23.27, down 8.75%. It dropped 69% from Dec. 7 through Thursday, as a test flight was abandoned last week because of a technical problem. The stock has soared 121% year to date through Thursday.

In its SEC filing, Virgin listed several risks for the company, including:

· “We have incurred significant losses since inception, we expect to incur losses in the future and we may not be able to achieve or maintain profitability.”

· The coronavirus pandemic “has disrupted and may continue to adversely affect our business operations and our financial results.

· “The market for commercial human spaceflight has not been established with precision, is still emerging and may not achieve the growth potential we expect or may grow more slowly than expected.

· “Our ability to grow our business depends on the successful development of our spaceflight systems and related technology, which is subject to many uncertainties, some of which are beyond our control.”