US missile maker Virgin Orbit is on the brink of bankruptcy, CNBC reports.
On Thursday, March 30, the company suspended its operations and laid off nearly all employees, and its shares traded at about 20 cents on Friday, March 31, bringing its market value to about $74 million.
When Virgin Orbit closed the SPAC deal, it raised less than half of the expected roughly $500 million because more shareholders paid back.
Virgin Orbit’s shares began to decline as broader markets shied away from risky and unprofitable assets, such as many shares of new space companies, limiting its ability to raise significant outside investment.
CNBC previously reported that billionaire Richard Branson – Virgin Orbit’s largest shareholder – did not want to further fund the company.
Instead, he began securing his 75% stake through a series of debt rounds. The loan gives the British billionaire first priority over Virgin Orbit’s assets in the now-looming bankruptcy situation.
Although Virgin Orbit promoted a flexible and alternative approach to launching small satellites, the company was unable to achieve the launch rate needed to generate much-needed revenue.
It’s an oft-told story in the history of the aerospace industry: Even the most exciting or innovative technologies don’t lead to big companies.
It is one of the few US rocket companies to successfully achieve orbit with a specially developed rocket. It has launched 6 flights since 2020 – with 4 successes and 2 failures – in an ambitious and technically challenging operation called “Air Launch”, which uses a modified 747 to shoot down a mid-flight missile and launch small satellites. Space.
The company’s leadership was aware of the deteriorating situation and lack of progress and even considered changes last summer, but failed to implement a clear plan that would pay off – leading to its downfall on Thursday, March 30.
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