Virgin GalaxyShare prices fell sharply on Monday, with a circuit breaker at one point in early trading. Earlier, the company announced an application for a placement of up to $500 million in common shares.

Virgin Galactic shares closed down 17.3% at $40.69, the biggest one-day drop since December 14. The stock has risen more than 80 per cent so far this year.

Virgin Galactic has 240 million outstanding shares, of which 164.6 million are available for public trading. According to the company's closing price of $49.20 on Friday, $500m is equivalent to nearly 10.2 million shares.

Bank of America CorporationVirgin Galactic had previously said it was one step closer to expanding its space tourism business after a successful test flight in space over the weekend, but maintained its "underweight" rating because of valuation problems.

Bank of America Corporation analyst Ronald Epstein said: "given our probability-weighted basis, as well as the bull market and bear market situation, we believe that risk returns are more inclined to the downside. In addition, we believe that the current valuation reflects more of the potential financial fundamentals and gives the company a healthy multiple premium on potential growth. "

Ken Herbert, an equity analyst at Canaccord Genuity, said: "We think Branson [the founder of Virgin Galaxy] is a massive marketing tactic for Virgin Galaxy, which the public cannot ignore." Canaccord Genuity has a buy rating on Virgin Galactic, but the target price is set at $35, below its current level.

23:40 Beijing time on July 11thVirgin GalaxyFounder and 70-year-old Richard Branson successfully returned from an 85.9-kilometer orbit aboard SpaceShip2, becoming the first founder of a commercial aerospace company to go into space, nine days before the founder of Blue Origin Bezos. Branson also became the second oldest astronaut.