Virgin Orbit, Richard Branson’s satellite launch venture, quickly collapsed
Two months ago Virgin Orbit VORB by Richard Branson -9.14%
Holdings Inc. was poised to make history by delivering the first satellites into orbit from the billionaire’s home country, Great Britain.
This high-profile launch from Cornwall, England, went horribly wrong, ending in the destruction of its satellite’s payload and initiating an investigation into what went wrong.
Now Virgin Orbit is in talks with two financial institutions for bailouts and has laid off employees, according to a person familiar with the matter. Late Thursday night, following the announcement of the suspension, shares of Virgin Orbit, which was listed less than two years ago at a valuation of more than $3 billion, fell more than 30%.
Shares in Virgin Orbit fell 9.1% on Friday to 65 cents a share from over $10 at their January 2022 peak.
It was a precipitous downfall for a once-popular company that was trying to build a business by launching smaller satellites into space. The challenges Virgin Orbit is facing are also the latest up and down trajectory for Mr. Branson’s company. Throughout his career, he has built a global brand around a portfolio of companies controlled by his private Virgin group.
These businesses have included music, airlines, cruise ships and a bank over the years, all of which have been particularly hard hit during the Covid-19 pandemic shutdown and travel restrictions.
At the time, Mr. Branson was quick to support his tourism and travel ventures, vowing to borrow money at some point against the security of his private island. Some, including Virgin Atlantic Airways, have proven resilient.
Among these adversities, Mr. Branson’s space ventures were a bright spot. In 2021, he ushered in the era of commercial space tourism by defeating Jeff Bezos by flying back to near space aboard a space plane operated by his Virgin Galactic Holdings. incl.
The 72-year-old celebrated with a livestream in a gravity-free cabin.
In the same year, he launched Virgin Orbit, which developed a new way to launch satellites inside a booster propelled partially into space under the wings of a Boeing 747. He registered the company using the so-called Special Purpose Acquisition Company, popular at the time, among other things, to ease barriers for companies seeking to go public.
Virgin Orbit gained a lot of industry credibility when Boeing Co. agreed to invest. Mubadala Investment Co., the sovereign wealth fund of the United Arab Emirates, is also a major investor.
While the satellite industry has historically been dominated by large vehicles launching large satellites, Virgin Orbit and a few other competitors around the world have specialized in smaller satellites in lower orbits, targeting civil, military and commercial customers in the lower end of the market. Prior to the launch failure in the UK, Virgin Orbit had four successful launches, launching 33 satellites into space.
However, this market has faced pressure from Space Exploration Technologies Corp. Elon Musk or SpaceX. SpaceX offers relatively inexpensive missions that deploy several small satellites from different operators. Some rocket industry executives have said they think there is only room for a couple of small rocket suppliers.
Virgin Orbit’s share price has been steadily declining for much of the past year. The company reported a loss of around $140 million in the first nine months of 2022.
CNBC previously reported that Virgin Orbit will lay off employees and suspend operations as it seeks funding.
Then, on January 9, instead of launching the first satellite from British soil, the Virgin Orbit rocket failed to enter orbit, destroying the payload: nine small satellites, including those for the US, UK and Oman governments.
This launch was the first international mission for Virgin Orbit to successfully fly missions to the US. He had to prove that her unconventional Boeing 747 launch strategy could be carried out from anywhere in the world.
On Thursday, the company said it had nearly completed its investigation into what went wrong in January.
—Mika Maidenberg contributed to this article.
Email Alistair Macdonald at Alistair.Macdonald@wsj.com
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