Virgin Galactic shares fall back to earth on fundraising announcement

Virgin Galactic Holdings Inc (NYSE:SPCE) stock came crashing back to earth by announcing a share issue the day after founder Sir Richard Branson was taken on a trip to the edge of space. The space tourism company announced that it will issue up to US$500mln of shares. In the prospectus issued for the fundraising, the company said it intends to use the net proceeds from the sale “for general corporate purposes, including working capital, general and administrative matters and capital expenditures for our manufacturing capabilities, development of our spaceship fleet and other infrastructure improvements. “We may also use a portion of our net proceeds to co-develop, acquire or invest in products, technologies or businesses that are complementary to our business. However, we currently have no agreements or commitments to complete any such transaction.” The shares, which had been trading over 7% higher in pre-market trading after the successful flight test at the weekend, tumbled 12% to US$43.38 in early deals on Monday.