Virgin Galactic just got some bad news from its famous founder.
Richard Branson told the Financial Times that he will no longer invest money into the space tourism company he founded in 2004. The surprise decision caused Virgin Galactic stock to drop as much as 15 percent on Monday.
The British billionaire said he is “still loving” the space travel project, but his Virgin Group conglomerate doesn’t have “the deepest pockets” after the Covid-19 pandemic. He added that Virgin Galactic should have “sufficient funds to do its job on its own.” (Virgin Group remains one of the biggest shareholders in Virgin Galactic.)
Virgin Galactic recently announced it is funded through 2026, adding that its cash position remains strong.
Virgin Galactic’s VSS Imagine spaceship.
Courtesy Virgin Galactic
“With our third quarter cash and marketable securities position of approximately $1.1 billion, we forecast having sufficient capital to bring our first two Delta ships into service and achieve positive cash flow in 2026,” Virgin Galactic CEO Michael Colglazier said in a statement shared in November.
Some analysts believe Virgin Galactic will need to look for additional funding from investors in 2025, though.
Virgin Galactic has completed six spaceflights in under six months, but announced in November that it was suspending commercial jaunts for 18 months from next year to save money for larger aircraft (the Delta class). The company also laid off about 18 percent of its workforce last month to help bring the next generation of ships into service. The company added that the successful completion of the Delta program will create “positive cash flow.” (Bigger ships mean more space for paying passengers.)
Branson joined three Virgin Galactic employees for the first fully crewed test spaceflight of Unity in July 2021.
Virgin Galactic
To date, Virgin Galactic has not made a profit. The company’s value is decreasing, too. It was valued at $2.3 billion when it debuted on the New York Stock Exchange in 2019 but is worth about $935 million as of December 1.
Virgin Galactic is planning to fly to space three times next year before it suspends commercial missions. Colglazier has also said that the company will focus on higher revenue opportunities for the remaining trips. That means passengers could be asked to pay up to $1 million per ticket, which is more than double that of the current $450,000 seat price. Sorry, space enthusiasts—your dreams trips to the cosmos just got a lot more expensive.