Is Virgin Galactic a Cash Crisis?Stocks fall 20% in 2 days

Sir Richard Branson talks about the voyage he described as a “lifelong experience” after jumping into space on a Virgin Galactic ship. PATRICK T via Getty Images. FALLON / AFP

Billionaire led Space travel industry Richard Branson’s Virgin Galactic, the only listed space travel company on the market, has seen a 28% drop in stock prices since the beginning of the year. After the company announced plans to raise up to $ 500 million in debt, many of the losses have been recorded in the last two days, giving investors a cool signal that the company may be depleted of cash. rice field.

Virgin Galactic Said On Thursday, we will issue more than $ 425 million of convertible bonds in a private placement. Convertible bonds are a type of debt certificate that can be converted into a predefined amount of equity. Senior convertible bonds take precedence over all other bonds issued by the same organization. Convertible bonds are a common funding tool used by both start-ups and established companies. However, the downside is the increased risk of bankruptcy, as the company can be in excessive debt.

Virgin Galactic investors seem to have interpreted this move as a warning about the company’s cash situation. The stock is currently trading at $ 9.77, below the initial public offering price in October 2019, far from the record high of $ 62.80 in early 2021.

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and statement, Virgin Galactic, “accelerates the development of a spacecraft fleet to promote mass commercial services, using net income from working capital, general controls, and offerings to fund capital expenditures. I will do it. “

In a test flight in July 2021, the company successfully launched founder Branson and three virgin employees into the under-orbit space. However, its commercial services have been delayed many times. Following Branson’s touted flight, the Federal Aviation Administration has launched a safety investigation into Virgin Galactic’s VSS Unity SpaceShipTwo spaceplane. This caused all flights to be temporarily grounded. The investigation was completed in September 2021 and gave Virgin Galactic permission to resume flight.

However, in October 2021, the company again postponed commercial services. Cites irrelevant technology upgrades. Currently, we are targeting October of this year to skip the first paying customers.

Is Virgin Galactic a Cash Crisis?Stocks fall 20% in 2 days

Is Virgin Galactic a Cash Crisis?Stocks fall 20% in 2 days

Source link Is Virgin Galactic a Cash Crisis?Stocks fall 20% in 2 days

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