- Just a short while ago, Virgin Orbit was flying high above its fellow U.S. rocket manufacturers, with executives toasting the company's successful public stock debut in New York. Today, however, Virgin Orbit's fortunes have taken a dramatic nosedive, and the company is teetering on the edge of bankruptcy. Just this past week, the company ceased operations and its stock was trading at 20 cents, leaving it with a market valuation of approximately $74 million.
CEO, Dan Hart, informed employees during an all-hands meeting that the company will be shutting down "for the foreseeable future" due to the inability to secure necessary funding. As a result, the company will be laying off almost all of its workforce, with only 100 positions remaining – a reduction of around 90% across all teams and departments. According to a securities filing, the layoffs will affect roughly 85% of the company's workforce or about 675 positions.
Why it matters
Virgin Orbit's SPAC deal raised less than the targeted $500 million because of shareholder redemptions, which left the company with limited funds. The declining market for new space stocks caused the company's shares to drop, making it difficult to attract outside investment. Branson, the company's largest shareholder, refused to provide more funding and turned to debt rounds instead, which give him priority access to Virgin Orbit's assets in case of bankruptcy.