Virgin Galactic Holdings, the space tourism company founded by Richard Branson, said Thursday that its board of directors has sanctioned a 1-for-20 reverse stock split of the company’s common stock. This reverse stock split is set to take effect at 5 p.m. ET on Friday (June 14, 2024), following the closure of trading on the New York Stock Exchange (NYSE).

The primary objective of the move is to elevate the per-share market price of Virgin Galactic’s common stock to satisfy the minimum bid price requirement for continued listing on the NYSE.

Trading on a split-adjusted basis will begin on Monday (June 17, 2024) under the current trading symbol “SPCE,” and the new CUSIP number for the stock will be 92766K 403.

Key details of the split

Here are some of the key details of the split, according to the company:

• Reclassification of shares: Every 20 shares of the company’s common stock currently issued and outstanding will be consolidated into one new share.
• Adjustment of equity awards: Proportional adjustments will be applied to the exercise prices and the number of shares underlying the company’s outstanding equity awards and equity incentive plans.
• No change to authorized shares or par value: The reverse stock split will not alter the number of authorized shares of common stock nor affect the par value of the common stock.
• Fractional shares: No fractional shares will be issued. Stockholders entitled to fractional shares will receive a cash payment based on today’s closing sales price per share.
• No action required: Stockholders who hold their shares electronically or through a bank, broker, or nominee need not take any action. Their holdings will be automatically adjusted to reflect the reverse stock split, and any fractional share payments will be processed according to their respective systems.

Shares in Virgin Galactic fell more than 10% in premarket trading following the announcement to 77 cents a share.

The stock has been in penny territory for some time. It has experienced a precipitous drop from the more than $55 a share seen in 2021, around the same time that the company sent a test flight to the edge of space with Branson aboard.

More recently, the company has seen significant layoffs and said it will pause flights as it develops a next-generation vehicle.