Virgin Galactic's whole mission is to eventually take passengers on trips to space.
Background: Virgin Galactic are one of Richard Branson's (aka the founder of Virgin Airlines) creations. Their whole mission is to eventually take passengers on trips to space.
What happened: Now, the company is issuing $700 million worth of debt in the form of convertible senior notes. The plan is to use this debt to accelerate the development of its spacecraft fleet.
What else: This is a bit of a 🚩🚩🚩🚩because it's already nearly two years past its commercial deadline. So, the news saw shares sink more than 16% at one point.
💡A convertible note is a type of debt used by start-ups and high growth companies looking to raise cash from investors. This debt is unique because it turns into equity at a later point.
💡For early stage companies, it can be hard to determine their true value because there aren't data points around revenue, profit and long-term growth rates.
💡This 'conversion' happens when more information becomes available to establish a proper valuation of the company.
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