What happened

Shares of Virgin Galactic stock (SPCE -1.94%) tumbled 4% yesterday after the company priced a 23.6 million-share secondary stock offering at $19.50 -- actually falling below the price that new investors will be asked to pay to participate in the offering, which closes on Monday, Aug. 10. Worse, they're down again in Friday trading, too -- falling a further 5.3% through 3:05 p.m. EDT.

Why is this happening?

Yesterday's move from more than $20 a share to just $19.34 a share was more or less predictable. After all, why would investors want to buy Virgin Galactic stock today, when they know that other folks will be buying it a few days from now -- for less money? Still, some may be puzzled as to why Virgin's shares are continuing to fall, now that the secondary pricing news is out.

Cartoon character sliding down a red arrow

Image source: Getty Images.

So what

If you ask me, it all comes down to investors looking for a reason to buy Virgin Galactic -- not necessarily today, or Monday, but any time at all over the next few months. It all comes down to catalysts.

You see, when Virgin Galactic released its earnings earlier this week, not only did the company not promise any good news on profits in the immediate future, but it basically ruled out the possibility. Virgin-watchers know that the company plans to launch a paid space tourism business sometime soon, but they also know that the first paying passengers won't be boarding flights aboard the VSS Unity spaceplane until company founder Sir Richard Branson takes it for a spin first.

And this week, Virgin confirmed that Branson won't be flying on Unity before Q1 2021 at the earliest.

Now what

Result: If Branson must fly before tourists can fly, and if tourists must fly before Virgin Galactic can book revenue from their tickets, and if Branson won't fly before Q1 2021, then ... it follows that there's little or no chance of Virgin Galactic booking any appreciable revenue for at least the next three quarters.

That prospect doesn't give investors much reason to buy the stock today -- but it may be giving them a reason to sell.