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Virgin Galactic (NYSE:SPCE) stock is in the spotlight today as the company’s 1-for-20 reverse split goes into effect. The firm, which specializes in carrying out commercial space flights, is executing the split in order to comply with the New York Stock Exchange’s minimum bid requirement.

SPCE Stock: Details About Virgin Galactic’s Reverse Split

The reverse split will result in a 95% drop in the number of shares outstanding of SPCE stock. Consequently, the company’s share price should climb about 20 times when trading in the name opens this morning. However, the overall value of each investor’s allotment of shares will remain roughly the same. Investors who would have been left with fractions of shares as a result of the split will instead be given cash payments.

The NYSE may delist stocks that close at less than $1 for 30 consecutive trading days. SPCE stock closed at 68.49 cents on Friday and had not closed above $1 since May 21.

Virgin Galactic’s Struggles and Its Path Forward

SPCE stock has sunk 54% in the last three months, while it has tumbled 72% in 2024. But its revenue did soar 410% last quarter versus the same period a year earlier, although it only generated sales of $1.99 million. Also importantly, it had a significant total of $867 million of cash at the end of the first quarter,

Moreover, the firm indicated that in 2026, it expects to have two of its Delta ships in service. These ships are expected to carry out about 750 space flights annually, generating revenue of about $450 million.

Over the 12 months that ended in March, the firm’s operating expenditures came in at $410 million. So if the firm can meet its revenue target and keep its spending flat, it will generate positive operating income in 2026, which should greatly boost SPCE stock.

On the date of publication, Larry Ramer did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.