Two months ago, Virgin Orbit VORB by Richard Branson -9.14%
Holdings Inc. was set to make history by delivering the first satellites into orbit from the billionaire’s home country of the UK
This high-profile launch from Cornwall, England, went wrong, ending with the destruction of its satellite payload and triggering an investigation into what went wrong.
Now Virgin Orbit is in talks with two financial institutions over a bailout and has laid off staff, according to a person familiar with the matter. Late Thursday, after revealing its operational pause, Virgin Orbit, which was listed less than two years ago at a valuation of more than $3 billion, fell more than 30%.
On Friday, Virgin Orbit ended down 9.1% to 65 cents per share, from more than $10 at its peak in January 2022.
It was a meteoric fall for a once-hit company that tried to build a business by launching smaller satellites into space. Virgin Orbit’s challenges are also the latest boom-to-collapse trajectory for a company owned by Mr. Branson. He has spent a career building a global brand around a portfolio of companies controlled by his tightly held Virgin Group.
These businesses over the years have included music, airlines, cruise ships and a bank. They have been particularly hard hit during the Covid-19 pandemic shutdowns and travel restrictions.
At the time, Mr Branson rushed to support his tourism and travel-related entities, at one point pledging to borrow money against his private island. Some, including Virgin Atlantic Airways, have shown resilience.
Amid these difficulties, Mr. Branson’s space ventures were a beacon of hope. In 2021, he kicked off the era of commercial space tourism, beating Jeff Bezos by flying a round trip to near space aboard a space plane operated by his Virgin Galactic Holdings. Inc.
The 72-year-old celebrated with a live, gravity-free float in the cabin.
The same year, he floated Virgin Orbit, which developed a new way to launch satellites inside a launch vehicle carried halfway into space under the wings of a Boeing 747. He listed the company using a so-called special purpose acquisition company, a popular vehicle at the time to, among other things, ease barriers for companies seeking to go public.
Virgin Orbit won a big industry vote of confidence when Boeing Co. agreed to invest. Mubadala Investment Co., the sovereign wealth fund of the United Arab Emirates, is also a big investor.
While the satellite industry has historically been dominated by large vehicles launching large satellites, Virgin Orbit and several other competitors around the world have specialized in smaller satellites in lower orbits, targeting civilian, military and commercial customers. at the bottom of the market. Prior to its failed UK launch, Virgin Orbit had completed four successful launches, putting 33 satellites into space, he said.
This market, however, has come under pressure from Space Exploration Technologies Corp. of Elon Musk, or SpaceX. SpaceX offers relatively low-cost missions in which several small satellites from different operators are deployed. Some rocket industry executives have said they believe there is only room for a few small launch vendors.
Virgin Orbit’s share price has been falling steadily for most of the past year. It reported a loss of around $140 million in the first nine months of 2022.
CNBC previously reported that Virgin Orbit would lay off staff and suspend operations while it seeks funding.
Then, on January 9, instead of delivering the first satellite launch from British soil, the Virgin Orbit rocket failed to reach orbit, resulting in the destruction of the payload: nine small satellites, including for the US, UK and Omani governments.
The launch was the first international mission for Virgin Orbit, which had conducted successful missions in the United States. It aimed to prove that its unconventional Boeing 747-assisted launch strategy can be leveraged around the world.
The company said on Thursday it had almost completed an investigation into what went wrong in January.
—Micah Maidenberg contributed to this article.
Write to Alistair MacDonald at Alistair.Macdonald@wsj.com
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