Virgin Galactic shares plunge on reverse stock-split announcement

By James Rogers

Virgin Galactic's board has approved a 1-for-20 reverse stock split

Shares of Virgin Galactic Holdings Inc. are down 9.1% in premarket trades after the space tourism company announced a reverse stock split late Wednesday.

The reverse stock split was approved by the company's shareholders at Virgin Galactic's (SPCE) annual meeting Wednesday. The company's board then approved the reverse stock split at ratio of 1-for-20.

In a statement, Virgin Galactic said the reverse stock split is expected to become effective at 5 p.m. Eastern on June 14, after close of trading on the New York Stock Exchange. The company's common stock is expected to start trading on a split-adjusted basis when the market opens on June 17, trading under the existing symbol SPCE.

Related: Virgin Galactic's stock skyrockets, sealing biggest gain in two weeks

"The primary goal of the reverse stock split is to increase the per-share market price of the company's common stock to meet the minimum per-share bid price requirement for continued listing on the NYSE," Virgin Galactic said, in the statement. "As a result of the reverse stock split, every 20 shares of the company's common stock issued and outstanding will be automatically reclassified into one new share of the company's common stock."

Virgin Galactic shares ended Wednesday's session down 5.5%, to 85 cents, after ending Tuesday's session up 12.3% to register their biggest gain in two weeks.

On Saturday, Virgin Galactic successfully completed the final commercial flight of its Unity spacecraft.

Related: Virgin Galactic completes final Unity flight, sets sights on new Delta spacecraft

The spaceflight company founded by Richard Branson will now halt commercial operations to develop its new Delta-class spacecraft, which is expected to enter commercial service in 2026.

Virgin Galactic shares are down 65.2% in 2024, compared with the S&P 500 index's SPX gain of 13.7%.

-James Rogers

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06-13-24 0713ET

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