Virgin Orbit is a satellite launch company that uses a modified Boeing 747 plane to air-launch rockets and send satellites into orbit. It was spun off from Richard Branson's space tourism firm, Virgin Galactic, in 2017. The company recently filed for Chapter 11 bankruptcy after failing to secure the long-term funding needed to recover from a rocket failure in January 2021. Apmefx will explain you everything you need to know about the current events regarding Virgin Galactic.
Filing for bankruptcy and seeking buyers
Virgin Orbit Holdings, owned by Richard Branson, has filed for Chapter 11 bankruptcy due to a lack of long-term funding after its rocket failed in January. The satellite launch company has laid off approximately 85% of its workforce and is seeking a sale of its assets. Virgin Orbit CEO Dan Hart stated that the company believes the Chapter 11 process represents the best path forward to identify and finalize an efficient and value-maximizing sale.
The company, which air-launches rockets from beneath a modified Boeing 747 plane to send satellites into orbit, went public in 2021 through a blank-check deal, raising 255 million USD less than expected. However, a shift in demand toward larger launch rockets and cost-effective shared rides to space on SpaceX's Falcon 9 rocket hurt Virgin Orbit's competitive position. [1]
Negative news seems to be affecting also Virgin Galactic, as the price of a stock fell for 4,20% * a day before the news about bankruptcy came out. In pre-market, the price of a stock is lower for additional 2%. [2]
Performance of Virgin Galactic Holdings, Inc. stock over 5 years. (Source: Tradingview) *
Virgin Orbit Holdings stock overview [3]
Stocks of Virgin Orbit Holdings are listed on Nasdaq Stock Exchange in USA, under the ticker “VORB”. The price of a stock is currently at 0,19 USD per share, which makes it affordable and available for any investor. Market capitalization of company is 65,38 million USD. As it can be seen from the chart below, since coming to the market, stocks of mentioned company only performed in red. When they entered the market in 2021, the price for a stock was 9,67 USD, but have fallen for 98% since then, to the current price. *
Movement of Virgin Orbit Holdings stocks since coming to the market. (Source: Google Finance) *
Virgin Orbit will or did fire 85% of staff
The California-based company listed its assets at approximately 243 million USD and total debt at 153.5 million USD as of September 30, and plans to find a buyer quickly. Virgin Orbit will lay off 85% of its 750 employees following a failure to secure funding, with total costs related to dismissals estimated at around 15 million USD. Branson's investment firm invested 10.9 million USD via a senior secured convertible note to pay out severance to the affected workers.
Virgin Orbit also announced that it will secure an additional 31.6 million USD through debtor-in-possession financing, a mechanism that enables a company to generate capital while undergoing bankruptcy proceedings. [4]
Conclusion
Virgin Orbit is seeking a sale of its assets and has laid off 85% of its workforce. Virgin Orbit's competitive position was hurt by a shift in demand towards larger launch rockets and cost-effective shared rides to space on SpaceX's Falcon 9 rocket. The negative news also seems to have affected Virgin Galactic's stock price. Virgin Orbit's stock price has fallen by 98% since it entered the market in 2021.* The company plans to secure an additional 31.6 USD million through debtor-in-possession financing while undergoing bankruptcy proceedings. For sure not promising news for the company, however, if they manage to get a buyer quickly, it maybe could be solved. We will keep an eye on their other company, Virgin Galactic.
Peter Svoreň, executive director Apme FX
* Past performance is no guarantee of future results.
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[2]https://www.google.com/finance/quote/SPCE:NYSE
