Virgin Orbit announced on March 16 the suspension of all operations. Most employees should be laid off. The company is suffering from chronic financial difficulty, this break should allow it to finalize an investment plan.
Britain’s launch industry is in trouble
Virgin Orbit, an offshoot of British billionaire Richard Branson’s Virgin Galactic, released a statement revealing ” an operational pause starting March 16, 2023 “. According to a regulatory filing, it should continue until, at least, March 21. The company promises new information next week.
The employees were informed the day before by the general manager Dan Hart. According to one of those present, quoted by Reuters, the aim would be to finalize an investment plan. The company has lost about 30% of its value since Thursday. By 2022 it had already lost 70%. Its market capitalization, when it was listed on the stock exchange in 2021, was 3 billion dollars, it is now 230 million.
This news is a direct result of the company’s resounding failure in January: the disappearance of its rocket with nine mini-satellites on board. Virgin Orbit aimed to develop a rocket launch industry in the UK. A Boeing 747, “Cosmic Girl”, had taken off from the southwest of England on January 9, with the rocket. The launch, over the Atlantic, went well, but an incident led to its loss.
This event may have fueled recent investor reluctance for space start-ups. Virgin Orbit suffered this reluctance all the more as the company raised questions. The development of its launch system cost a billion dollars. After a successful first mission in January 2021the pace never really took off with a mission every six months.
Virgin Orbit needs funds to land the moon
Virgin Orbit’s finances have suffered. When it went public in 2021, it only raised $68 million. It was forced to seek an additional $160 million from private investors. In the third quarter of 2022, which ended at the end of September 2022, the company recorded $44 million in losses. Its cash position, from 122.1 million dollars at the end of June, fell a few months later to 71 million dollars.
The investments made by Richard Branson himself, or his companies, 25 million in November, 20 in December, then 10 in February, did not reassure. Investors began to doubt the solvency of the company. This break should allow the company to raise its head with new sources of financing.