When Virgin Orbit went public its valuation was pegged at around $4 billion, however the tides have turned in recent months with the company’s market capitalization now pegged at around $65.38 million.
Space technology and satellite launch 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 Per CNBC, the bankruptcy was filed in the US Bankruptcy Court for the District of Delaware and was precipitated as the company was unable to raise additional funds from investors.
Virgin Orbit was founded in 2017 by Sir Richard Branson, who also maintains a 75% ownership of the company. The company went public in 2021 shortly after starting its trading services. Since it began its operations, the company has registered 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 major financial obligations and Sir Branson refuses to provide additional funding for the venture.
“While we have gone to great lengths to address our financial position and secure additional funding, ultimately we must do what is best for the business,” Virgin Orbit chief executive Dn Hart said. saying in a statement released today.
The company will be one of the major teams in the United States that have run into their Waterloo, as companies in highly volatile markets like Genesis Trading also filed for bankruptcy earlier this year. The difference with Virgin Orbit is that its creditors are fewer and there is confidence in its technology that seems attractive to buyers at the moment.
“We believe the cutting-edge launch technology this team has created will have great buyer appeal as we continue to sell the Company. At this stage, we believe 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 company’s focus remains on selling its assets, there is a general move by the company to lay off its workers in order to significantly reduce its costs.
“Today my thoughts and concerns are with the many talented teammates and friends who are now finding their way forward and who have committed themselves to the mission and promise of all that Virgin Orbit stands for,” said CEO Dan Hart.
When Virgin Orbit went public its valuation was pegged at around $4 billion, however the tides have turned in recent months with the company’s market capitalization now pegged at around $65.38 million.
In addition to Sir Branson, Abu Dhabi’s sovereign wealth fund Mubadala, which has the second largest stake in the company at 18%, will be the biggest loser now that the company has filed for bankruptcy.
The search for a suitable buyer continues as the firm looks to phase out all of its operations in its active areas.
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Benjamin Godfrey is a blockchain enthusiast and journalist who enjoys writing about the real-life applications of blockchain technology and innovations to drive mainstream acceptance and global integration of emerging technology. His desire to educate people about cryptocurrencies inspires his contributions to renowned blockchain-based sites and media. Benjamin Godfrey is a lover of sports and agriculture.
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