What happened

Capitalizing on its strong stock price performance last week, space tourism pioneer Virgin Galactic (NYSE:SPCE) announced Friday — at the start of a three-day hiatus from stock trading — that it will raise $1 billion in new capital through the issuance of approximately 2.7 million new shares of common stock.

On Tuesday, the first day investors got to react to the news, they did so immediately by selling off Virgin Galactic stock, which is now down 6.3% in 11:40 a.m. EDT trading.

So what

Virgin Galactic’s capital-raise announcement came in the form of an S-3 filing with the SEC Friday evening. According to this document, Virgin Galactic has not set a final price for the shares it will offer, nor has it decided precisely how many shares it will have to issue to raise the desired $1 billion in gross proceeds — a number it picked “solely for the purpose of calculating the registration fee” that it must pay the SEC.

So while $1 billion divided by 2.7 million shares results in a price of $375 per share, it probably won’t work out that way.

Now what

Rather, the primary takeaway from Virgin Galactic’s S-3 filing should be this:

• First, the company wants to raise $1 billion.
• Second, it might do this through the sale of “an indeterminate number of additional shares” of common stock.
• But third, it might also raise the money it wants through the issuance of “preferred stock, “debt,” “depositary shares,” “warrants,” “purchase contracts,” and/or “units” — or any combination thereof — in addition to the 2.7 million shares of common stock.

It’s all very much up in the air at this point, and Virgin Galactic is just warning investors: It needs a lot of money, and it’s laying the groundwork to raise it one way or another.