Virgin Galactic Tumbles After Delaying Commercial Service Again

·1 min read

(Bloomberg) -- Virgin Galactic Holdings Inc. shares dropped after the space tourism company again delayed its commercial service, calling for a launch in the second quarter of 2023.

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The startup had previously disappointed investors by pushing back the launch, once planned for the third, then fourth quarter of 2022. In May, Virgin Galactic delayed it to the first quarter of 2023.

Virgin Galactic shares fell 14% in premarket trading Friday to $7.08 as of 7:58 a.m. in New York. The stock dropped about 39% this year through Thursday’s close.

Analysts warned in research notes after Virgin reported second quarter earnings Thursday that its cash burn rate is accelerating and it will likely need to raise more cash through equity, which could further weigh on the shares.

The company posted a net loss of $110 million for the quarter and said its cash and cash equivalents totaled $329.9 million, down 40% from a year ago.

On a conference call to discuss those results, Chief Executive Officer Michael Colglazier cited supply-chain disruptions and labor constraints as pressures on its operations.

The company, founded by entrepreneur Richard Branson, last month said it was contracting with Boeing Co.’s Aurora Flight Sciences to design and build two motherships. The twin-hulled aircraft carry its passenger spaceships to about 50,000 feet and release them to travel into space.

(Updates with shares in third paragraph.)

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