Virgin Galactic Holdings Inc on Monday filed to sell up to $500 million in common stock, a day after the company completed its first fully crewed test flight into space with billionaire founder Richard Branson on board.

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Shares in Virgin Galactic reversed premarket gains of 8% to trade down nearly 12%, wiping off more than $1 billion from the company's market capitalization following the share sale announcement.

The sale would account for up to 4% of Virgin Galactic's total outstanding shares as of their last close, according to a Reuters calculation.

Branson's trip upstaged rival astro-tourism venture Blue Origin founded by Jeff Bezos, the former chief executive officer of Amazon.com Inc, who is slated to fly to space on July 20 along with his brother, Mark.

The rivalry popularized as the "billionaire space race" also includes SpaceX CEO Elon Musk and is underpinned by optimism that space travel will become mainstream with technological advancements and falling costs. Swiss investment bank UBS estimates space tourism could be a $3 billion annual market by 2030.

That sentiment has also led to shares in Virgin Galactic surging nearly 84% so far this year.

A Virgin Galactic spokesperson on Sunday told the Wall Street Journal that Musk had bought a ticket for his own space ride with Branson's company.

Virgin Galactic has said it plans at least two further test flights of the spaceplane in the months ahead before beginning regular commercial operation in 2022.