Richard Branson is gearing up to sell part of his stake in Virgin Galactic (SPCE) to help fund his airline and other travel-related industries. Virgin Galactic stock sank.
XBranson, the founder of Virgin Group, is looking to sell up to 25 million shares of Virgin Galactic, worth roughly $504.5 million.
The shares account for nearly 22% of Branson's total Virgin Galactic stake, which was worth about $2.32 billion at the end of last week.
"Virgin intends to use any proceeds to support its portfolio of global leisure, holiday and travel businesses that have been affected by the unprecedented impact of Covid-19," the company said in a release.
Branson's businesses include airlines Virgin Atlantic and Virgin Australia as well as small satellite company Virgin Orbit.
Over the weekend, U.K. Prime Minster Boris Johnson announced that all travelers flying into the U.K. need to quarantine for 14 days as the country struggles with the highest number of coronavirus deaths in Europe.
Virgin Galactic shares fell 3.9% to close at 19.40 on the stock market today. Shares soared in February on high-hopes that the company had the potential to shake up the air travel industry with high-speed point-to-point travel. Shares then fell with the general market in March as the pandemic rocked Wall Street. The stock retook its 50-day line following earnings, according to MarketSmith analysis.
Virgin Galactic Earnings
Last week, Virgin Galactic reported a Q1 net loss of $60 million as revenue fell 87% to $238,000. Estimates for Q1 weren't available, though earnings aren't expected anytime soon as passenger flights have yet to begin. In Q4, Virgin Galactic reported a net loss of $73 million on revenue of $529,000.
Virgin said it had received 400 refundable deposit payments from prospective passengers in 44 countries as part of its "One Small Step" initiative. The tickets amount for over $100 million in future revenue once ticket sales reopen and passengers pay the full ticket price.
Branson hoped to fly aboard the first commercial SpaceShipTwo flight for his 70th birthday in July. But that timeline is under pressure due to the coronavirus pandemic.
Also last week, Virgin Galactic said it's entered into a Space Act Agreement with NASA on developing a sustainable high-mach supersonic vehicle. The U.S. space agency has been working on high-mach flight with its Supersonic X-59 test plane built by Lockheed Martin (LMT).
Last year, Boeing (BA) venture capital arm HorizonX took a $20 million minority stake in Virgin to help the space company develop a vehicle to travel Earth at hypersonic speeds.
Follow Gillian Rich on Twitter @IBD_GRich for space news and more.
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