Virgin Galactic (SPCE) - Get Virgin Galactic Report came falling back to earth Monday after the aerospace company founded by billionaire Richard Branson said in a filing that it may sell up to $500 million worth of stock.
Shares of the Las Cruces, New Mexico, company were tumbling 11.5% to $43.54 on Monday. Trading was briefly halted shortly after the opening bell.
The price drop was in stark contrast to the stock's premarket surge after Branson and a five-person flight crew on Sunday completed a test flight of the company's VSS Unity space plane with plans to launch space tourism trips next year.
Virgin Galactic said in a filing with the Securities and Exchange Commission that it entered into a distribution agreement with Credit Suisse Securities, Morgan Stanley and Goldman Sachs in which the company may offer to sell up to $500 million in shares of the company's common stock.
"Our management will retain broad discretion as to the allocation of the proceeds," the company said in the filing.
Branson and his crew departed from Virgin Galactic’s Spaceport America launch site outside of Truth or Consequences, N.M., at 8:40 a.m. local time on Sunday and returned at 9:38 a.m. after a mission to test the private astronaut experience and evaluate the commercial customer cabin environment and conditions.
The Swiss investment bank UBS has estimated the potential value of the space tourism market reaching $3 billion annually by 2030, Reuters reported.
Last week, Cowen analyst Oliver Chen more than doubled his stock-price target for Virgin Galactic to $51 from $23, the highest on Wall Street.