Virgin Orbit (VORB), the satellite startup which spun out from Virgin Galactic in 2017, closed at 15 cents a share on Tuesday after filing for Chapter 11.
The Long Beach, California–based company will try to sell all of its assets under bankruptcy protection.
“We believe that the cutting-edge launch technology that this team has created will have wide appeal to buyers as we continue in the process to sell the company. At this stage, we believe that the Chapter 11 process represents the best path forward to identify and finalize an efficient and value-maximizing sale,” said Dan Hart, CEO of Virgin Orbit, in a company statement.
Last week the company announced it would cease operations “for the foreseeable future” after failing to secure a funding lifeline and laid off most of its staff. The stock tanked 40%, down to 20 cents, immediately following the news.
Virgin Orbit aimed to be a prominent player within the satellite launch industry but faced pricing pressure from capitalized competitors. The startup’s business model centered around small rocket launches, which can operate from locations all over the world.
In January, Virgin Orbit attempted its first launch from Britain, but the mission was a failure. The rocket and the satellites belonging to the U.K., the U.S., and other governments never made it to orbit.
The failure couldn’t have come at a more difficult time to raise capital. Higher interest rates have made the cost to borrow more expensive.
Founded by Sir Richard Branson, Virgin Orbit went public in 2021 via a merger with a special purpose acquisition company, or SPAC. Shares were trading around a $10 level during the last quarter of 2021. Shares never took off from there and steadily declined last year. Shares are down more than 90% year-to-date.
