VORB: Virgin Orbit Sees its Share Price Halved in a Month, Seeks Lifeline
- Virgin Orbit’s share price has halved in a month after the failure of its first UK satellite launch.
- The company is planning for insolvency if it cannot secure emergency funding.
- Restructuring firms A&M and Ducera and reportedly in discussions with the company.
In January, Virgin Orbit attempted to launch satellites in its first ever UK rocket launch in Cornwall. The launch however, was not meant to be – as the mission resulted in the satellites being lost in the ocean. It predicts that the soonest another UK rocket launch could take place is sometime in 2024. A probe has now been initiated looking into why the launch failed, but the damage to the company’s reputation, it seems, has already been done.
Crashing down to Earth
Investors have taken notice of the failures of Richard Branson’s rocket company, as its share price has been more than halved in the space of a month. On Thursday, VORB plummeted by close to 30%, as the company announced it would be pausing its operations and furloughing staff while it seeks emergency funding. It has also reportedly been planning for insolvency in the event that it cannot secure a lifeline.
What happens now?
Virgin Orbit says it plans to issue an update on its status in the coming weeks, but until then investors will be waiting with bated breath. The company found a competitive niche in the satellite-launch industry by using modified commercial Boeing aircraft to launch satellites, and even secured funding from Boeing itself in 2021. But having reported a $140m loss for the first 9 months of last year, investors were already feeling uneasy about the company’s financials. If it can’t find funding imminently, the likely scenario is the insolvency route.