A replica model of Virgin Orbit's LauncherOne rocket, in Newquay, Britain, on Jan. 8.HENRY NICHOLLS
Billionaire Richard Branson’s Virgin Orbit said it was exploring strategic opportunities and was in talks for potential funding after a cash crunch forced the satellite launch company to pause operations starting Thursday.
The operational halt is expected to continue until March 21, said Virgin Orbit VORB-Q, which has furloughed nearly all its employees, a source familiar with the matter said on Wednesday.
The furlough is intended to buy the company time to finalize a new investment plan, Chief Executive Dan Hart said in a staff meeting, according to the source.
Shares sank 45 per cent in premarket trading on Thursday, leaving Virgin Orbit with a market capitalization of just around $200-million. That’s a far cry from the more than $3-billion valuation the company fetched in 2021 when it went public through a blank-check deal.
The stark drop reflects a downturn in investor appetite for space startups such as Virgin Orbit and Rocket Lab USA, which saw its stock fall about 70 per cent last year, as well as the challenges faced by these companies in efforts to send their rockets to orbit.
Virgin Orbit in November cut its target for mission launches in 2022. Its rocket LauncherOne in January failed a mission to deploy nine small satellites into lower Earth orbit due to an anomaly during its flight through space.
The company booked a loss of nearly $44-million in the third quarter ended Sept. 30 and had cash reserves of about $71-million at the time, a sharp drop from $122.1-million as of June-end. It has not announced a date for its fourth-quarter results.
It has since made efforts to boost its cash position; about$10-million was raised last month and a $25-million investment in November from Branson’s Virgin Investments – its majority shareholder with a stake of about 75 per cent.