Virgin Galactic, the pioneering space tourism company founded by Richard Branson, is experiencing significant turbulence in the stock market. Following Branson's announcement that he does not intend to invest further in the company, citing its “sufficient funds,” the company's shares took a sharp downturn.
As the market opened at 9 a.m. ET on Monday, Virgin Galactic's stock had fallen by 16%, with shares trading at less than $2 each. This financial instability comes despite a year of landmark achievements for Virgin Galactic, including the much-anticipated launch of its first customers to the edge of space.
However, the company has faced its share of challenges, including a recent reduction of about 20% of its staff and the development of a new line of suborbital spacecraft, poised to replace the vehicle that has been over a decade in the making.
In a Financial Times article published on Sunday, Branson, whose investment company Virgin Group has been financially impacted by the pandemic, expressed confidence in Virgin Galactic's current financial standing. "Virgin Galactic has got $1 billion, or nearly," he stated.
"It should, I believe, have sufficient funds to do its job on its own." According to the company's latest financial filing in November, it had approximately $1.1 billion in cash and securities.
Virgin Galactic's Journey: Past Achievements and Future Plans
Despite offloading roughly $1 billion of his personal investment in Virgin Galactic between 2020 and 2021, Branson's Virgin Group remains one of the company's largest shareholders.
The company made significant strides in commercial space travel, commencing regular service in 2023 after Branson himself participated in one of the inaugural crewed flights aboard the VSS Unity in 2021. This year, Virgin Galactic has successfully launched six groups to the edge of space, including test pilots, paying customers, honorary guests, and employees.
However, in a strategic shift outlined in its November financial report, the company announced a slowdown in its operations. The plan is to conduct spaceflights aboard VSS Unity on a quarterly basis, rather than monthly, as previously done.
Looking ahead, Virgin Galactic is preparing for its next mission, Galactic 06, scheduled for January 2024. As the company navigates these challenging financial and operational waters, the future of commercial space travel continues to unfold, with Virgin Galactic at its forefront.