Virgin Galactic submits prospectus on sale of securities worth $1bn

By Ashika Rajan, Trainee Reporter
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Virgin Galactic
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According to a filing to the Securities and Exchange Commission, American space flight company Virgin Galactic submitted a prospectus on the sale of $1 billion in mixed securities and up to 2.7 billion shares of common stock.

According to the company, the proceeds will be used for general corporate purposes.

The company said in the prospectus that “assuming the exercise of all outstanding warrants for cash, we will receive an aggregate of approximately $30.7 million.”

The planned stock sale comes after the company’s successful manned test flight to the edge of space last week.

The success of the VSS Unity test flight, which took off from New Mexico, has helped the company get back on its earlier schedule of flying founder Mr. Richard Branson to suborbital space as soon as this summer, as well as boosting the stock price.

On the last day, the company’s stock closed 0.45 percent higher at $31.23. Virgin Galactic has a $7.52 billion market capitalization.

Virgin Galactic received a further boost on the last day after analyst Mr. Ken Herbert from the financial service company, Canaccord initiated the coverage of the company’s stock with a buy rating. Mr. Herbert stated that the company’s prospects appeared bright, thanks to less competition in a potentially profitable space travel market.

The VSS Unity can transport up to six passengers and two pilots. There are approximately 600 reservations for future Virgin Galactic flights, with ticket prices ranging from $200,000 to $250,000 each.

According to specialized space industry consultancy Northern Sky Research, the company is tapping into the potential field of suborbital tourism, which is estimated to be a $2.8 billion market with $10.4 billion in sales by 2030. In addition to Virgin Galactic, Blue Origin, which is owned by Jeff Bezos, is working on suborbital flights.

Related: Latest test flight puts Virgin Galactic back in the game; Shares spike