ORANGE COUNTY, Calif. - Virgin Galactic Holdings, Inc. (NYSE: NYSE:SPCE), a company specializing in aerospace and space travel, has announced a 1-for-20 reverse stock split of its common stock, approved by the Board of Directors and stockholders. The reverse stock split is scheduled to take effect after the market closes on June 14, 2024, with shares trading on a split-adjusted basis from June 17, 2024, under the ticker SPCE.
The reverse stock split aims to boost the per-share market price of Virgin Galactic's common stock to comply with the New York Stock Exchange's minimum bid price requirement for continued listing. This corporate action will convert every 20 existing shares into one new share of common stock. The company will adjust equity awards and shares under equity incentive plans proportionately.
Stockholders will not receive fractional shares but will be compensated with a cash payment based on the closing sales price per share of the common stock on the NYSE on the effective date of the reverse stock split. Continental Stock Transfer & Trust Company will act as the exchange agent for the reverse stock split. Shareholders with shares in electronic book-entry form or through banks, brokers, or nominees will have their shares automatically adjusted to reflect the reverse stock split.
Further details about the reverse stock split can be found in the Company's definitive proxy statement filed with the Securities and Exchange Commission on April 29, 2024. This move follows Virgin Galactic's commitment to pioneering human spaceflight for private individuals and researchers, as the company continues to develop its next-generation air and space vehicles.
InvestingPro Insights
In light of Virgin Galactic Holdings, Inc.'s (NYSE: SPCE) announcement regarding a reverse stock split, investors may find the following data and tips from InvestingPro valuable for assessing the company's current financial health and market position.
InvestingPro Data shows a challenging picture for Virgin Galactic, with a market capitalization of $351.59 million USD and significant revenue growth over the last twelve months as of Q1 2024, at 251.91%. However, this growth is from a relatively small base, with revenue recorded at $8.39 million USD. Despite the revenue increase, the company's gross profit margin is deeply negative at -767.52%, indicating that the costs of goods sold vastly exceed the revenue.
Two InvestingPro Tips that stand out for Virgin Galactic are its substantial cash reserves compared to debt, suggesting a degree of financial stability, and the high volatility in its stock price. The latter is particularly relevant considering the upcoming reverse stock split, which is typically a move made by companies aiming to stabilize their share price and maintain listing compliance.
Investors should note that Virgin Galactic is not expected to be profitable this year, and analysts anticipate a sales decline in the current year. The company's valuation also implies a poor free cash flow yield, as per InvestingPro analysis. For those looking to delve deeper into Virgin Galactic's financials and market predictions, InvestingPro offers additional tips, and readers can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
It's important to mention that there are 16 additional InvestingPro Tips available, which could provide further insights into Virgin Galactic's performance and future outlook. These tips are crucial for shareholders and potential investors to consider, especially in the context of the company's strategic decisions such as the reverse stock split.
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