Virgin Galactic Enables Sale of Up to $250 Million in Shares to Fund Operations and Expansion
Key Facts
Virgin Galactic signed an agreement on November 12 allowing it to sell up to $250 million in aggregate value of common stock from time to time, according to a filing with the U.S. Securities and Exchange Commission. The agreement with Jefferies sets a cap on the offering, but does not mean the company has raised that amount or will sell all the available shares. The company says potential net proceeds may go toward working capital, operations and growth initiatives, as well as repayment of some debt. The financing comes as cash, cash equivalents and marketable securities stood at $184 million on September 30, 2026. The agreement comes amid operating and financing needs while the company continues to record cash outflows ahead of the resumption of commercial flights.
The program does not require a minimum sale, so the company said the actual value of sales, commissions and proceeds it will receive, if any, cannot currently be determined. The agreement also provides for a commission of up to 3.0% of the gross sale price of each share to Jefferies. The company disclosed that issuing shares could dilute existing shareholders' stakes, with the extent of the effect depending on the number of shares sold and their price. The filing adds a restriction on the use of proceeds: Virgin Galactic expects to allocate at least 35% of net cash proceeds to repurchase some of its senior notes due in 2028, in accordance with the debt agreement's requirements. Other potential uses of the funds include the disclosed purposes of operations, growth initiatives and repayment of some existing obligations.
The new agreement follows a previous sales program with Jefferies, under which Virgin Galactic sold 45 million shares during the nine months ended September 30, 2026. Gross proceeds from those sales totaled $145 million before commissions and expenses, according to the company's quarterly report filed with the SEC. In the third quarter of 2026, the company recorded revenue of $0.4 million, unchanged from the same quarter a year earlier. It attributed the revenue to access fees for future astronauts and an event for them, not to resumed commercial spaceflights. The net loss was $59 million, compared with $64 million in the third quarter of 2025, and the company said lower operating expenses were the main driver of the improvement.
Free cash flow was negative $99 million in the third quarter, compared with negative $108 million in the same period of 2025. The company expects free cash flow to remain negative in the fourth quarter of 2026, in a range of negative $80 million to $90 million. In its quarterly report, management said its assessment, excluding factors such as revenue, capital transactions and debt repayment terms, indicated that cash and marketable securities might not be sufficient to cover planned operations over the next twelve months. The report added that this assessment raises substantial doubt about the company's ability to continue as a going concern. These figures put the potential financing in the context of the company's need to support liquidity as it continues spending on its return-to-commercial-flight program.
In a November business update, Virgin Galactic said the first glide flight of the Apeiron vehicle is expected in January 2027, and the first commercial spaceflight is expected in early in the second quarter of the same year. In an August update, the company had said commercial flights would begin in February 2027, before the announced timing shifted in November to early in the second quarter. It also expects the second spaceplane to begin commercial flights in late in the second quarter or early in the third quarter of 2027. The CEO said Apeiron's arrival at Spaceport America shifts the focus to operational readiness, preparation for flight testing and the start of flights. The company has also begun booking a limited batch of Spaceflight Expeditions flights at $850,000 per seat.
Further out, the company plans to open a high-cadence launch hangar and a fueling facility in the second half of 2028. It expects this infrastructure to increase capacity by 20% to 150 spaceflights a year. The filing links the use of some potential proceeds for growth initiatives to building the hangar and expanding rocket motor production, alongside funding operations. Virgin Galactic shares closed at $2.67 on November 13, down 6.97% during the session, then traded at $2.625 after hours, a further decline of 1.69%, according to a report attributed to Reuters. The decline came on the trading day following the announcement of third-quarter results and the share-sale agreement, as the company prepares for the next operational phase according to its announced timetable.