Virgin Galactic’s stock value plummeted by more than 17% following an announcement by founder Richard Branson that he would no longer invest in the commercial space travel company. Branson cited the financial constraints on his business empire, including Virgin Investments, in the aftermath of the COVID-19 pandemic as a reason for this decision.
Operational Changes and Financial Struggles
Virgin Galactic, established by Branson in 2004, has faced significant financial challenges recently. The company announced job cuts and suspended commercial flights for 18 months to save funds for developing a larger spacecraft, Delta, intended to carry passengers to the edge of space. The ticket price for flights on Galactic’s Unity space plane, which completed its sixth commercial flight in six months, is set at $450,000 per passenger.
Virgin Orbit Shutdown and Cost Management
In March, another venture of Branson’s, Virgin Orbit, ceased operations after a failed launch and a shortage of cash. This closure indicates a broader strategy by Branson to avoid further financial losses in his space ventures.
Shareholding and Company Value
Despite reducing his investment, Branson’s Virgin Investments remains the second-largest shareholder in Virgin Galactic, holding a 7.69% stake. The largest stake is held by State Street Global Advisors at 8.43%. Virgin Galactic’s market value has seen a significant decline since its public listing on the New York Stock Exchange in 2019, dropping from $2.3 billion to $935 million.
Conclusion
Richard Branson’s decision to halt further investment in Virgin Galactic marks a significant moment for the commercial space industry, reflecting the financial challenges and uncertainties in this ambitious sector. The company’s stock plunge underscores investor concerns about the future of commercial space travel amidst economic pressures.
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