Richard Branson’s Virgin Orbit, with a rocket under the wing of a modified Boeing 747 jet, takes off for an important high-altitude launch test of its satellite launch system from Mojave, California, July 10, 2019.
Mike Blake | Reuters
Virgin Orbit is putting nearly all of its employees on leave and shutting down operations for per week as it seeks life-saving measures, people conversant in the matter told CNBC.
Virgin Orbit shares are down about 33% in after-hours trading from Wednesday’s close of $1.01 a share. The stock has steadily declined since debuting at nearly $10 a share in December 2021.
Company management briefed employees on the situation at an all-employee meeting at 5 p.m. EST on Wednesday, based on individuals who attended the meeting. Leave is unpaid, although workers can money in PTO, and only a small team continues to work. Virgin Orbit can be raising payroll by per week to Friday.
In accordance with individuals who asked to stay anonymous to debate internal matters, company leaders told employees they intended to offer an update on vacation and financial status by next Wednesday or Thursday.
A Virgin Orbit spokesperson confirmed in a press release to CNBC that the corporate is entering an “operational hiatus”. Virgin Orbit plans to offer “updated information on further operations in the approaching weeks,” the spokesperson added.
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A rocket-building company has developed a system that uses a modified 747 jet to send satellites into space by dropping a rocket from under the plane’s wing mid-flight. But the corporate’s last mission resulted in a mid-flight failure, and an issue during launch caused the rocket to miss orbit and crash into the ocean.
“Our investigation is nearly complete and our next production rocket with the needed modification enabled is in the ultimate stages of integration and testing,” a Virgin Orbit spokesperson said.
When Virgin Orbit announced its third-quarter ends in early November, it disclosed a money balance of $71.2 million at the top of the quarter. Faced with revenues of $30.9 million, Virgin Orbit posted an adjusted EBITDA lack of $42.9 million for the period as it continued to devour money.
Because the fourth quarter, the corporate has been repeatedly raising funds in the shape of debt through Richard Branson’s Virgin Group investment arm. In November, the corporate raised $25 million in unsecured convertible bonds, followed by $20 million and $10 million in senior secured convertible bonds in December and February, respectively. The memos give Branson’s parent company “first priority” in Virgin Orbit’s assets.
As of Wednesday, the corporate had not yet announced when it would publish its fourth-quarter 2022 results.
Earlier this week, Virgin Orbit CEO Dan Hart canceled a scheduled panel appearance on the Washington, D.C., space industry conference scheduled for Tuesday on the last minute.