Virgin Orbit, Richard Branson’s Satellite-Launch Venture, Has Fallen Fast

Now, Virgin Orbit is in talks with two financial institutions about a bailout and has furloughed staff, according to a person familiar with the matter. Late Thursday, after disclosing its operational pause, Virgin Orbit—which listed less than two years ago at a valuation of more than $3 billion—fell more than 30%. 

On Friday, Virgin Orbit ended trading 9.1% lower at 65 cents a share, down from over $10 at its peak in January 2022.

It has been a meteoric fall for a once-hot company that has tried to build a business launching smaller satellites to space. Virgin Orbit’s challenges are also the latest boom-to-bust 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 closely held Virgin Group. 

Those businesses over the years have included music, airlines, cruise ships and a bank. They took a particularly hard hit during the Covid-19 pandemic shutdowns and travel restrictions. 

At the time, Mr. Branson raced to prop up his tourism and travel-related entities, pledging at one point to borrow money against his private island. Some, including Virgin Atlantic Airways, have proven resilient. 

Amid those travails, Mr. Branson’s space ventures were a bright spot. In 2021, he kicked off the age of commercial space tourism, beating Jeff Bezos in completing a return-trip to near space aboard a space plane operated by his

Virgin Galactic Holdings Inc.

The 72-year-old celebrated with a live-streamed, gravity-free float in the cabin.

The same year, he floated Virgin Orbit, which developed a novel way of launching satellites inside a launcher carried part way to space under the wings of a

Boeing

747. He listed the company using a so-called special-purpose acquisition company, a vehicle popular at the time for, among other things, easing barriers for companies seeking to go public. 

Virgin Orbit won a big vote of confidence in the industry when Boeing Co. agreed to invest. Mubadala Investment Co., the United Arab Emirates sovereign-wealth fund, is also a big investor.

While the satellite industry has historically been dominated by large vehicles launching large satellites, Virgin Orbit and several other rivals worldwide have specialized in smaller satellites at lower orbits, targeting civil, military and commercial customers at the lower end of the market. Before its failed U.K. launch, Virgin Orbit had had four successful launches, putting 33 satellites into space, it has said.

That market, however, has faced pressure from

Elon Musk’s

Space Exploration Technologies Corp., or SpaceX. SpaceX offers relatively low-price missions in which multiple small satellites from different operators are deployed. Some rocket-industry executives have said they believe there is room for just a couple of small-launch providers.

Virgin Orbit’s stock price fell steadily through most of last year. It reported a loss of about $140 million through the first nine months of 2022.

CNBC previously reported that Virgin Orbit would furlough staff and pause operations as it sought funding.

Then, on Jan. 9, instead of delivering the first satellite launch from British soil, Virgin Orbit’s rocket failed to reach orbit, leading to the destruction of the payload: nine small satellites including for the U.S., U.K. and Omani governments.  

The launch was the first international mission for Virgin Orbit, which had conducted successful missions in the U.S. It was meant to prove that its unconventional Boeing 747-assisted launch strategy can be operated from across the globe.

The company said Thursday that it has nearly completed an investigation into what went wrong in January. 

—Micah Maidenberg contributed to this article.

Write to Alistair MacDonald at [email protected]

Now, Virgin Orbit is in talks with two financial institutions about a bailout and has furloughed staff, according to a person familiar with the matter. Late Thursday, after disclosing its operational pause, Virgin Orbit—which listed less than two years ago at a valuation of more than $3 billion—fell more than 30%. 

On Friday, Virgin Orbit ended trading 9.1% lower at 65 cents a share, down from over $10 at its peak in January 2022.

It has been a meteoric fall for a once-hot company that has tried to build a business launching smaller satellites to space. Virgin Orbit’s challenges are also the latest boom-to-bust 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 closely held Virgin Group. 

Those businesses over the years have included music, airlines, cruise ships and a bank. They took a particularly hard hit during the Covid-19 pandemic shutdowns and travel restrictions. 

At the time, Mr. Branson raced to prop up his tourism and travel-related entities, pledging at one point to borrow money against his private island. Some, including Virgin Atlantic Airways, have proven resilient. 

Amid those travails, Mr. Branson’s space ventures were a bright spot. In 2021, he kicked off the age of commercial space tourism, beating Jeff Bezos in completing a return-trip to near space aboard a space plane operated by his

Virgin Galactic Holdings Inc.

The 72-year-old celebrated with a live-streamed, gravity-free float in the cabin.

The same year, he floated Virgin Orbit, which developed a novel way of launching satellites inside a launcher carried part way to space under the wings of a

Boeing

747. He listed the company using a so-called special-purpose acquisition company, a vehicle popular at the time for, among other things, easing barriers for companies seeking to go public. 

Virgin Orbit won a big vote of confidence in the industry when Boeing Co. agreed to invest. Mubadala Investment Co., the United Arab Emirates sovereign-wealth fund, is also a big investor.

While the satellite industry has historically been dominated by large vehicles launching large satellites, Virgin Orbit and several other rivals worldwide have specialized in smaller satellites at lower orbits, targeting civil, military and commercial customers at the lower end of the market. Before its failed U.K. launch, Virgin Orbit had had four successful launches, putting 33 satellites into space, it has said.

That market, however, has faced pressure from

Elon Musk’s

Space Exploration Technologies Corp., or SpaceX. SpaceX offers relatively low-price missions in which multiple small satellites from different operators are deployed. Some rocket-industry executives have said they believe there is room for just a couple of small-launch providers.

Virgin Orbit’s stock price fell steadily through most of last year. It reported a loss of about $140 million through the first nine months of 2022.

CNBC previously reported that Virgin Orbit would furlough staff and pause operations as it sought funding.

Then, on Jan. 9, instead of delivering the first satellite launch from British soil, Virgin Orbit’s rocket failed to reach orbit, leading to the destruction of the payload: nine small satellites including for the U.S., U.K. and Omani governments.  

The launch was the first international mission for Virgin Orbit, which had conducted successful missions in the U.S. It was meant to prove that its unconventional Boeing 747-assisted launch strategy can be operated from across the globe.

The company said Thursday that it has nearly completed an investigation into what went wrong in January. 

—Micah Maidenberg contributed to this article.

Write to Alistair MacDonald at [email protected]