Billionaire Richard Branson's Virgin Orbit said it was exploring strategic opportunities and was in talks for potential funding after a cash crunch forced the satellite launch company to pause operations from today.
The operational halt is expected to continue until March 21, said Virgin Orbit, which has furloughed nearly all its employees, a source familiar with the matter said.
The furlough is intended to buy the company time to finalise a new investment plan, chief executive Dan Hart said in a staff meeting, according to the source.
Shares sank 45% in premarket trading today, leaving Virgin Orbit with a market capitalisation of just around $200m.
That is a far cry from the more than $3 billion valuation the company fetched in 2021 when it went public through a blank-check deal.
The stark drop reflects a downturn in investor appetite for space startups such as Virgin Orbit and Rocket Lab, which saw its stock fall about 70% last year, as well as the challenges faced by these companies in efforts to send their rockets to orbit.
Virgin Orbit in November cut its target for mission launches in 2022.
Its rocket LauncherOne in January failed a mission to deploy nine small satellites into lower Earth orbit due to an anomaly during its flight through space.
The company booked a loss of nearly $44 million in the third quarter ended September 30 and had cash reserves of about $71m at the time, a sharp drop from $122.1m as of the end of June.
It has not announced a date for its fourth-quarter results.
It has since made efforts to boost its cash position - about $10m was raised last month and a $25m investment in November from Branson's Virgin Investments - its majority shareholder with a stake of about 75%.
