Virgin Galactic, the space tourism venture founded by Richard Branson, is experiencing a significant decline in its shares.
This comes after the British billionaire announced that he has no intentions of injecting additional funds into the company, citing its current financial sufficiency.
As of Monday’s 9 a.m. ET market open, Virgin Galactic’s stock plummeted by 16%, trading at less than $2 per share.
Despite achieving a milestone by flying its first customers to the edge of space, the company is changing, including a recent layoff of approximately 20% of its workforce.
Additionally, Virgin Galactic is in the process of introducing a new line of suborbital spacecraft, named Delta, which is set to replace the existing vehicle developed over a decade.
In an article published by the Financial Times on Sunday, Branson explained that his investment company, Virgin Group, faced financial challenges due to the pandemic.
However, he emphasized that Virgin Galactic already possesses “sufficient funds” amounting to around $1 billion, according to the company’s latest financial filing from November.
This financial strength is expected to sustain Virgin Galactic until the launch of the Delta spacecraft in 2026.
Despite laying off about 185 workers (18% of its workforce) in November, the company appears optimistic about its future endeavors.
Branson, who had previously divested a substantial portion of his investment in Virgin Galactic, clarified that Virgin Group remains one of the company’s major shareholders.
Virgin Galactic achieved a milestone in 2023 by initiating regular commercial service after Branson’s crewed flight to space aboard the VSS Unity in 2021.
While the company has launched multiple groups of passengers to the edge of space this year, its November financial report indicated a planned reduction in the frequency of spaceflights.
Virgin Galactic intends to send customers to space on VSS Unity quarterly instead of monthly, with the next mission, Galactic 06, scheduled for January 2024.
Looking ahead, the company plans to temporarily halt VSS Unity flights next year as it focuses on preparing the new Delta spaceplanes.
Branson expressed continued enthusiasm for Virgin Galactic, emphasizing the company’s proven technology and accomplishments in the space tourism sector.
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