Billionaire Richard Branson’s space empire teeters as Virgin Orbit flops
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Richard Branson has become a face of the private space industry especially after his 2021 space flight.
PHOTO: REUTERS
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London - Billionaire Richard Branson’s space empire is getting a bruising reality check.
Virgin Orbit Holdings, the satellite-launch company filed for bankruptcy on Tuesday
That dragged down the stock of Mr Branson’s other space company, Virgin Galactic Holdings, whose shares hit their lowest level in 2023.
The woes are a black eye for Mr Branson, a pioneer of the private space industry. He has backed ventures in that market since the early 2000s, with the prototype SpaceShipOne flying to the edge of space in 2004.
Virgin Orbit began in 2017 as an offshoot of Virgin Galactic and listed in December 2021 at the height of the special purpose acquisition company (Spac) boom.
“This is yet another example of a Spac gone bad for longer-term investors,” said Mr Timothy Galpin, a senior lecturer in strategy and innovation at the University of Oxford’s Said Business School.
“It will likely damage Branson’s brand at least a bit, as the private space industry is high-profile and any news, good or bad, is widely publicised.”
Virgin Group, which owns about 75 per cent of the company, said in a statement on Tuesday it was proud of Virgin Orbit’s achievements – including the launch of 33 satellites.
Virgin Group added that it and Mr Branson had invested more than US$1 billion (S$1.3 billion) in the company, including recent funds allowing it to seek a bidder for remaining assets.
Mr Branson has become a face of the industry alongside fellow billionaires Jeff Bezos and Elon Musk, particularly after the British mogul’s 2021 space flight.
Enthusiasm around that mission, aboard Virgin Galactic’s VSS Unity spaceship, sent Virgin Galactic’s market value above US$13 billion.
The company has had its struggles since.
After Mr Branson’s flight, it was revealed that the craft had deviated from its intended flight path during the trip, triggering a federal investigation.
While the United States Federal Aviation Administration ultimately cleared Virgin Galactic to resume space flights in 2021, the company then announced it would pause flights to upgrade its vehicles. The company has since repeatedly delayed the start of commercial operations.
Virgin Orbit, meanwhile, burned through cash while pursuing air-based launch technology.
The company was set to boost its profile with the first-ever launch from British soil in January, but the failure of that mission sent it spiralling.
Virgin Orbit halted operations in March and subsequently laid off the majority of its staff after failing to secure funding – and receiving no lifeline from Mr Branson.
While Mr Branson has no operational role in Virgin Orbit, his Virgin Group Holdings is the majority owner of its shares. Virgin Investment is the largest shareholder in Virgin Galactic, with an 11 per cent stake.
Virgin Galactic’s shares fell 12 per cent on Tuesday to close at US$3.43 in regular trading in New York, giving it a market value of US$961 million.
Virgin Orbit, which was worth more than US$3.5 billion following its 2021 trading debut, tumbled 23 per cent and was worth just US$50.2 million.
“Branson obviously hasn’t kept up with his fellow space entrepreneurs, Musk and Bezos, and at this point it doesn’t look like he will,” said Mr Galpin. BLOOMBERG
