Virgin Galactic Holdings Inc (SPCE) shares experienced a sharp decline on Thursday, following the company’s announcement of an at-the-market equity program aimed at funding its fleet expansion. This news overshadowed the company’s mixed financial results for the third quarter, which saw them beat earnings expectations but miss on revenue.
After the market closed on Wednesday, Virgin Galactic released its financial report, revealing revenue of $402,000, falling short of the estimated $2.23 million. However, the company reported a quarterly loss of $2.66 per share, surpassing analyst expectations for a loss of $4.25 per share. The company also reported negative free cash flow of $118 million and projected a similar range of negative $115 million to negative $125 million for the fourth quarter. Despite these figures, Virgin Galactic ended the quarter with a healthy cash position of $744 million in cash, cash equivalents, and marketable securities.
“Our spaceship program remains on track to begin commercial operations in 2026, and with strong progress made on the Delta program, we now have the engineering capacity to advance design work on a second mothership, which will accelerate the next phase of growth for Virgin Galactic,” stated Michael Colglazier, CEO of Virgin Galactic, highlighting the company’s continued commitment to its space tourism ambitions.
A few hours after the earnings release, Virgin Galactic revealed plans to sell up to $300 million of its common stock through an at-the-market program. The company intends to use the proceeds to expedite the development and production of its next-generation spaceflight fleet, encompassing an additional mothership and Delta Class spaceships.
This fundraising strategy, however, seems to have triggered investor apprehension, leading to a significant drop in SPCE share prices. At the time of publication, Virgin Galactic shares were down 11.9% at $6.27, according to Benzinga Pro.
While Virgin Galactic surpassed earnings expectations, the market’s reaction to the equity program suggests that investors are prioritizing the company’s near-term financial stability and profitability over its long-term growth prospects.
The future of Virgin Galactic remains uncertain, but the company’s focus on expanding its fleet and launching commercial space tourism operations in 2026 might be the key to regaining investor confidence and ultimately achieving sustainable success in the burgeoning space tourism market.
