Why Virgin Galactic Stock Crashed 20% on Friday
Virgin Galactic Holdings (NYSE: SPCE) stock plummeted 19.5% through noon ET Friday after the space tourism provider announced plans to sell as much as $400 million in new stock -- and noted it had already sold $300 million more in stock over the past 10 months.
In a filing with the SEC, Virgin Galactic revealed that, pursuant to a "distribution agency agreement" signed in August 2022, the space company had sold 22 million shares (worth $135.4 million) through the end of March 2023 (i.e., the end of the last quarter), and a further 37.4 million shares (worth $164.6 million) between the end of March and June 22 -- the date of the filing.
That adds up to $300 million in new stock sold over the last 10 months, and 59.4 million new shares put in circulation. Thus, 21% of all shares currently outstanding were created in just the last 10 months -- a truly staggering amount of stock dilution.
Source Fool.com
