Virgin orbits files for bankruptcy
In a major blow to Virgin Galactic, the company’s shares fell by 8% today following the bankruptcy of its subsidiary, Virgin Orbit. The company had suspended operations in March, laid off almost all of its employees, and tried to find funding, but to no avail. This latest development has exacerbated the holding company’s long-standing problems and triggered a significant drop in share prices.
The situation is a far cry from the hype that surrounded Virgin Galactic just a couple of years ago, when Richard Branson announced the flight of a group of tourists, including himself, into space in the summer of 2021. The successful flight sparked investor interest and led to a more than two-fold increase in share prices. The company promised to make space tourism a reality and earn huge profits from it, with plans to start regular flights the following year.
However, things did not go as planned. After the summer 2021 flight, Virgin Galactic conducted no further tests for over 18 months, and tourist flights have been repeatedly postponed. Meanwhile, share prices have plummeted from $56 to just $4 in just over two years.
The latest setback for the company comes in the form of Virgin Orbit’s bankruptcy filing. The subsidiary had previously launched satellites into orbit and had enjoyed some success. However, recent failures with launches, lack of funding, and high interest rates have all taken their toll, affecting not just the subsidiary but the entire holding company as well.
With the ongoing problems facing Virgin Galactic and its subsidiaries, it seems unlikely that share prices will ever reach the dizzying heights of 2021. The company will need to regroup and find a way forward if it hopes to realize its dream of making space tourism a profitable venture.
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