Skeptical Financiers Take a Closer Look at Virgin Galactic
upstart writes:
Rocket Report: Virgin Galactic's stock crash:
Financial trade publications are starting to raise serious questions about the valuation of Virgin Galactic, which became publicly traded in 2019 via a special-purpose acquisition company [SPAC]. The latest issue involves the company's plans to raise up to $425 million of convertible debt, which essentially allows Virgin Galactic to receive a lower interest rate on debt in exchange for a fixed price on stock shares. The Financial Times explains more here. Apparently, the terms of this deal (the financial wizardry of which is beyond the capacities of a simple space writer) were adverse for existing shareholders.
Publications have also started to take note of the stark disconnect between Virgin Galactic's projections at the time it went SPAC in 2019 and where it is today. For example, Virgin Galactic forecast $398 million in revenues in calendar year 2022, whereas analysts now expect it to bring in $7.9 million. "Let's just hope their aerospace engineering is a touch more precise than their financial engineering. For their customers' sake," the Financial Times says snarkily. Virgin Galactic's stock has fallen from a high of $59.41 in February 2021 to less than $10 today.
Virgin Orbit's [note: not Virgin Galactic] LauncherOne rocket lofted seven small satellites for three different customers on January 13, Space.com reports. This marks the third straight successful mission for the California-based company. LauncherOne flew for the first time in May 2020 on a test flight that carried no satellites. That launch failed after a fuel line in the rocket's first-stage engine ruptured.
Since then, Virgin Orbit's next three flights have all gone orbital. For a company just starting to launch rockets, one launch every six months is an impressive cadence. This month's flight really helps to establish LauncherOne's status as a reasonably timely and reliable small-satellite rocket.
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