Virgin Galactic Eyes Reverse Stock Split in Bid to Stay on NYSE

Richard Clough and Loren Grush, Bloomberg News

A monitor displays Virgin Galactic Holdings Inc. signage during the company's initial public offering (IPO) on the floor of the New York Stock Exchange (NYSE) in New York, U.S., on Monday, Oct. 28, 2019. Richard Branson's Virgin Galactic Holdings Inc. became the first space-tourism business to go public as it began trading Monday on the New York Stock Exchange with a market value of about $1 billion. Photographer: Michael Nagle/Bloomberg , Bloomberg

(Bloomberg) -- Virgin Galactic Holdings Inc. is proposing a reverse split of its beaten-down shares as the Richard Branson-founded space tourism company tries to maintain compliance with stock market standards.

The company will seek approval at its June 12 shareholder meeting for a reverse stock split in a ratio between 1-for-2 and 1-for-20, according to a regulatory filing Thursday. The exact ratio and timing of a split would be determined by the board.

A reverse stock split, which inflates the price by combining the shares, would raise investor perceptions of its stock and could help Virgin Galactic remain listed on the New York Stock Exchange, the company said. Stocks must maintain a minimum average closing price of at least $1 a share over 30 days to avoid being delisted. The shares fell below $1 this week for the first time and have closed below that level each of the last two days.

Read More: Richard Branson’s Space Empire Is Fading Fast

“If our common stock were to be delisted, the board believes that the trading market for our common stock could become significantly less liquid,” the company said in the filing.

While Virgin Galactic has completed multiple commercial flights taking tourists to the edge of space, the company has had some recent missteps, including a technical problem with one mission and the tumbling stock price. It has also announced job cuts.

The company plans to launch one more time this summer before suspending commercial operations until at least 2026 to focus on developing a next-generation vehicle.

The shares were little changed at 97 cents as of 5:05 p.m. after regular trading in New York. Virgin Galactic has fallen 60% this year.