Shares of Virgin Galactic Holdings Inc. (SPCE) plunged 14.1% in premarket trades on Monday following the announcement by founder Sir Richard Branson ruling out additional investment in the space-tourism company. In an interview with the Financial Times, Branson stated that his business empire will not inject more funds into Virgin Galactic despite the recent elaboration of its near-term growth strategy.
Funding Dilemma
Branson explained, “We don’t have the deepest pockets after Covid, and Virgin Galactic has got $1bn, or nearly. It should, I believe, have sufficient funds to do its job on its own.” While the company grapples with ongoing challenges amid the pandemic, including reporting a deeper-than-expected first-quarter loss and missing analysts’ revenue estimates, Branson believes that Virgin Galactic must navigate independently with the resources it currently holds.
A Turbulent Journey
Virgin Galactic, established by Branson in 2004, has seen its stock suffer from the struggles faced by Branson’s satellite launch company Virgin Orbit Holdings Inc., which filed for bankruptcy protection earlier this year. As a result, Virgin Galactic shares have plummeted by 32.8% in 2023, in stark contrast to the S&P 500 index’s gain of 19.7%.
Despite these obstacles, Virgin Galactic remains determined to pursue its mission of space tourism and aims to overcome present difficulties with its existing funds. It remains to be seen how the company will weather these challenges and forge a successful path forward.
