Tuesday, April 4, 2023

And... Virgin Orbit Declares Bankruptcy

Not that "it's over" in some final sense just yet, but Virgin Orbit filed for bankruptcy on Monday April 3rd, shortly after the satellite launch company failed to secure two financing deals and furloughed most of its staff.  Virgin Orbit is California based, but is filing for bankruptcy in the United States Bankruptcy Court for the District of Delaware. Its first hearing will be held virtually via Zoom on Wednesday (April 5) at 1:30 pm EST (1730 GMT).  Virgin is filing under Chapter 11, commonly known as "reorganization bankruptcy" which allows the company to continue basic operations while it looks for a buyer.

Virgin Orbit's "Start Me Up" mission suffered a rocket launch failure in January 2023 due to a technical error, resulting in the loss of nine customer satellites. By mid-March, the company had paused operations and announced layoffs for about 90% of its workforce. Last week, the company was in conversation with two financers but failed to secure a deal, which seemed to be the last straw and the determining factor behind the company's decision to file for bankruptcy.

The company was valued at $65 million at the end of Monday (April 3) and had its shares plummet by 24% on Tuesday (April 4) soon after it announced bankruptcy, Reuters' Joey Roulette reported early on Tuesday.

While the failure of the January '23 mission out of the UK is probably the one most people will think of first being the most recent, the company has launched 33 satellites to orbit to date.  I'd have to guess that the prices they can charge to put satellites into orbit this way aren't enough to cover the cost of operations.

Virgin Orbit's "first stage", named Cosmic Girl, which carries Launcher One above the densest part of the atmosphere.  Virgin Orbit photo.



6 comments:

  1. Is this reflective of an economic slowdown looming?

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    1. It could be, but I think the small sat launch business is so successful that they just can't compete. I think for most small businesses, small (college) labs and others trying to get their "few pounds" of payload into a useful orbit, that cost is the big deal. I remember reading about a coming shakeout in the smallsat launch business a few years ago. It could just be that.

      Rocket Lab has been really successful in the less than 1metric ton to orbit market. SpaceX is the 800 pound gorilla in both bigger satellites and smaller satellites with their Transporter missions. I mean, they'll probably launch 80% of the world's tonnage into orbit this year.

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  2. I that their business model was insufficiently robust. They lacked sufficient vision and flexibility.

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  3. Wait to see if anyone buys it out of bankruptcy.

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    1. I saw one article reference this issue that stated that Richard Branson had some deal that he would get hardware from the company if they declared bankruptcy.

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