In 2004, British billionaire Sir Richard Branson dreamed of making commercial space travel a reality and founded Virgin Galactic, the first major company dedicated to private space travel. In 2018, Virgin Galactic achieved its first suborbital space flight, and in 2019, the company landed on the New York Stock Exchange. In the field of commercial space flight, Virgin Galactic once went hand in hand with Musk's SpaceX, but the fate of both parties has become significantly different after the epidemic.
In early November, Virgin Galactic announced that it would lay off about 18% of its employees, citing cost reductions and realignment of resources. Its sister company, Virgin Orbit, which is responsible for launching satellites, declared bankruptcy at the end of March this year. This is in sharp contrast to SpaceX, which has continuously received large orders.
Last Sunday, Virgin Galactic founder Sir Branson gave the market another blow, saying that he would not add any more funds to the company because it already has enough funds. After the U.S. stock market opened on Monday, investors fled en masse.
As of the close of U.S. stocks on Monday, Virgin Galactic’s share price plummeted 17.5% to less than $2. Since the beginning of this year, the company's stock price has fallen by 44.7%, which seems out of place in the overall rising environment of U.S. stocks.
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According to Branson, due to the impact of the epidemic, the financial situation of his Virgin Group has experienced some problems. The Virgin Group is a major investor in Virgin Galactic, which may explain Branson’s refusal to pursue further investment.
He also said that Virgin Galactic has received close to US$1 billion in funding, which he believes is sufficient to achieve its goals independently. This was also confirmed in Virgin Galactic’s Q3 financial report. The company currently has approximately $1.1 billion in cash and securities on its books.
This money will be needed to support Virgin Galactic's launch of its new Delta series of larger rocket-powered aircraft. According to Virgin Galactic’s own estimates, this series of spacecraft may not debut until 2026.
Branson himself has sold most of his personal investment in Virgin Galactic, offloading about $1 billion worth of stock between 2020 and 2021. However, the Virgin Group under his name is still the largest shareholder of Virgin Galactic.
In addition to Branson’s troubling investment strategy, Virgin Galactic also revealed a chill in its operations. So far this year, the company has launched six groups of passengers to the edge of space, with crews including test pilots, paying customers, guests of honor and company employees, finally fulfilling the promise of space travel.
But now that commercial travel seems to be on track, in its November financial report, Virgin Galactic stated that it will slow down its pace and no longer insist on sending space travel once a month, but instead once every quarter.
At the same time, its CEO Michael Colglazier also said that the company plans to completely stop flying existing aircraft later next year as the company prepares its new Delta aircraft. Considering that the new aircraft will not be available until 2026, Virgin Galactic may be forced to stop receiving customers for nearly a year and a half.
Wall Street is eager to know whether Branson is planning to give up, but the latter can only reassure investors that they are still excited about Virgin Galactic and that the company has proven itself.