Sir Richard Branson's Virgin Galactic Holdings Inc has assured that it is working on a plan to prevent its shares being ejected from the New York Stock Exchange after the stock price fell below the required minimum.
The NYSE sent a message yesterday warning the space tourism group that the average closing share price was below $1.00 over 30 consecutive trading days, which is required for continued listing on the exchange.
Virgin Galactic told the NYSE that it intends to resolve this by getting approval at its annual stockholders meeting next month to complete a reverse stock split.
Details on the share consolidation were filed with the US market regulator, the Securities and Exchange Commission, last month, when it said a reverse stock split ratio would range "from any whole number between 1-for-2 and 1-for-20, as determined by the board".
The board said it believes the move "could potentially help to stabilize trading in our common stock and increase marketability, trading volume and liquidity".
Under NYSE rules, the company now has six months to regain compliance, though its stock will continue to be listed and traded on the exchange.
"Virgin Galactic remains committed to its strategic focus of delivering Delta Class spaceships for commercial service in 2026 and scaling the business to deliver profitable growth and stockholder value over the long term," last night's statement concluded.
The new Delta class of larger spaceships are hoped to drive growth and lead to profitability.
At the start of this month, the company reported first-quarter revenue of $2 million and said it expects the VSS Unity space craft to launch its 'Galactic 07' mission in early June.
Boss Michael Colglazier said the company was looking to complete the bulk of the Delta design phase this summer and move "more fully into the build phase", with commercial services beginning in 2026.
Cash and equivalents stood at $867 million at the end of March.