Virgin Galactic Holdings Inc. saw its shares tumble after the company’s board of directors agreed to a 1-for-20 reverse stock split aimed at maintaining the stock’s listing on the New York Stock Exchange. The decision, proposed in April after the stock fell below $1 per share for the first time, was finalized with a split ratio of 1-for-20. Virgin Galactic stated that the primary goal of the reverse stock split is to increase the per share market price of the company’s common stock to comply with stock market standards, which require a minimum average closing price of at least $1 per share over 30 days to avoid delisting.
Following the announcement, Virgin Galactic’s shares tumbled as much as 31% after regular trading in New York before paring the decline, ultimately being down 14% as of 5:01 p.m. This vote comes just four days after the company performed its last spaceflight of the year before a planned hiatus from commercial operations. The pause in operations is intended to allow Virgin Galactic to focus on developing a new class of spaceplanes, known as Delta, which are designed for easier turnaround and reuse between flights.