Virgin Galactic shares dropped below SPAC debut price two years later

Virgin Galactic’s VSS Unity passenger rocket plane, carrying billionaire entrepreneur Richard Branson and his team, lands after reaching the boundary of space above the America’s Spaceport near Truth or Aftermath, New Mexico, USA, July 11, 2021.

Joe Skipper | Reuters

Space travel company Virgin Galactic fell below $ 11.75 in Thursday’s trading, below the level it debuted at more than two years ago.

Sir Richard Branson’s Virgin Galactic went public through a merger with a specialized acquisition company or SPAC of Chamath Palihapitiya in October 2019. Since then, the stock has experienced volatile speculative trading – falling nearly $ 7 per share in the months since its debut and surging to $ 62.80 per share in February 2021.

Although the space tourism company said during its debut that it plans to start flying for customers in 2020, delays in testing and development of spacecraft have steadily pushed that schedule back. Following the launch of Branson and three other company employees on a test space flight in July 2021, due to further delays, Virgin Galactic’s commercial service was delayed until the end of this year.

The company maintains preliminary revenue and is losing $ 55 million to $ 65 million in the quarter on an adjusted EBITDA basis.

Virgin Galactic fell to a 52-week low of $ 11.30 Thursday morning before cutting its losses.

Notably, Branson has steadily sold portions of his stake in Virgin Galactic since the company went public. In four major deals, Branson has recouped over $ 1.25 billion, although he remains Virgin Galactic’s largest shareholder.

Its global business conglomerate Virgin Group said in a statement to CNBC that the proceeds from the sale of Virgin Galactic shares are intended to support Branson’s other travel and entertainment businesses hit by the Covid-19 pandemic.

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