When Virgin Orbit went public, its valuation was pegged at around $4 billion, however, the tides have shifted over the past few months with the company’s market capitalization now pegged at around $65.38 million.
Satellite launcher and space technology company Virgin Orbit Holdings Inc (NASDAQ: VORB) has filed for Chapter 11 bankruptcy in the United States bringing a solemn end to its months of financial instability. As reported by CNBC, the bankruptcy was filed in the US Bankruptcy Court in the District of Delaware and it became precipitated as the company was unable to secure additional funding from investors.
Virgin Orbit was founded in 2017 by Sir Richard Branson who also maintains 75% ownership of the firm. The company went public in 2021 shortly after it started its commercial services. Since it started its operations, the company has recorded a total of 6 missions, of which only 4 were successful.
Coupled with the strained global economy over the years, Virgin Orbit has been unable to meet its core financial obligations with Sir Branson refusing to provide additional funding for the firm.
“While we have taken great efforts to address our financial position and secure additional financing, we ultimately must do what is best for the business,” Virgin Orbit CEO, Dn Hart said in a statement released earlier today.
The company will one of the top outfits in the United States that have met its Waterloo as firms in highly volatile markets like Genesis Trading have also filed for bankruptcy this year. The difference with Virgin Orbit is that its creditors are fewer, and there is trust in its technology which appears attractive to buyers at this time.
“We believe that the cutting-edge launch technology that this team has created will have wide appeal to buyers as we continue in the process to sell the Company. At this stage, we believe that the Chapter 11 process represents the best path forward to identify and finalize an efficient and value-maximizing sale,” he added.
Virgin Orbit Bankruptcy: Next Steps
While the focus of the company remains to sell off its assets, there is a general move by the company to lay off its workers in order to cut down on its costs significantly.
“Today my thoughts and concerns are with the many talented teammates and friends now finding their way forward who have been committed to the mission and promise of all that Virgin Orbit represents,” CEO Dan Hart said.
When Virgin Orbit went public, its valuation was pegged at around $4 billion, however, the tides have shifted over the past few months with the company’s market capitalization now pegged at around $65.38 million.
Besides Sir Branson, the Abu Dhabi sovereign wealth fund Mubadala which holds the second-largest stake in the firm at 18% will come off as the biggest loser now that the company has filed for bankruptcy.
The search for a suitable buyer is ongoing as the firm looks to gradually close all of its operations in its active areas.
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