Virgin Galactic Holdings Stock Slides as Debt Gamble Deepens

Virgin Galactic Holdings ( (SPCE) ) has fallen by -14.59%. Read on to learn why.

Virgin Galactic Holdings shares dropped 14.59% over the past week as investors digested a sweeping overhaul of the company’s balance sheet and lingering doubts about its path to profitability. The space-tourism pioneer has repurchased roughly $355 million of its 2.50% convertible notes due 2027, cutting the outstanding amount to just over $70 million, while issuing new 9.80% first-lien notes maturing in 2028 and raising fresh equity and warrants. In simple terms, Virgin Galactic is swapping near-term, conversion-heavy debt for longer-dated secured borrowings and new shares, buying more time but at the cost of shareholder dilution and higher interest expenses.

This capital reshuffle has rattled the market. While management argues the move extends the company’s financial runway into 2028, the timing – coming as the business remains deeply loss-making, with minimal revenue and ongoing cash burn – has amplified fears that existing investors will be squeezed before the company reaches meaningful commercial scale. Analysts have reacted cautiously: Morgan Stanley trimmed its price target to $2.30 and kept an Underweight rating, while technical indicators still flag the stock as a “Strong Sell,” underscoring skepticism that the new structure alone can offset weak fundamentals.

Still, Virgin Galactic is trying to flesh out a broader story beyond space tourism. The company announced a new collaboration with Lawrence Livermore National Laboratory to test advanced sensor systems on its launch vehicles, targeting future revenue from high-altitude data and imaging services. For now, however, the market seems more focused on the balance-sheet risk than on long-term promise, and the 14.59% weekly slide reflects a tug-of-war between investors betting on a future commercial breakthrough and those worried that the company may run out of financial fuel before liftoff truly begins.