Branson’s space dreams are crashing to Earth for the last time
No one said extraterrestrial exploration was easy but some attempts are best quickly forgotten.
Take Sir Richard Branson. The billionaire’s quest for the final frontier has gone so badly that there is probably more chance of finding Elvis on the Moon than there is of the bearded billionaire firing another rocket into space – although investors in his Virgin Orbit outfit may be tempted to have a go themselves with him strapped to one.
Failed ventures are ten a penny in Branson’s chaotic world – the price of true entrepreneurship, he might say – but this one may top the lot. And that includes Virginware, which set the bar particularly high when it collapsed with a fire sale of 35,000 pairs of Virgin-branded bras and G-strings.
The decision to lay off 85pc of the Virgin Orbit workforce after a frantic dash for emergency funding failed effectively signals an abrupt and premature end to the company’s attempts to be taken seriously as a commercial satellite launch specialist. Without a sizeable cash injection, Virgin Orbit is expected to fold.
In reality, its ambitions died in January, in the unlikely setting of the Cornish coast when the company’s attempts to pull-off the first-ever launch of a satellite from British soil ended in disaster, in front of a crowd of star-gazers.
The spectacle didn’t last long. A rocket that had been deployed at just after 11pm, came tumbling back to Earth with its payload of nine expensively assembled satellites less than an hour later, taking Virgin Orbit’s share price and its prospects with it.
It won’t do much for the UK’s ambitions to become an international space hub either, not when you count the slow motion disaster that was satellite internet start-up OneWeb.
But seldom has a major company, and one with such a high-profile backer, unravelled so quickly. An offshoot of Virgin Galactic in 2017, its shares have been listed on the Nasdaq stock exchange for less than 18 months. It was another product of the top-of-the-market craze for blank shell companies that swept Wall Street when dirt-cheap money was searching for a home, or in some cases it seemed – any home.
Worth $3.7bn when it floated, the shares are currently valued at less than $100m after crashing 44pc in after market trading in the US, though frankly it’s a wonder they are still trading at all.
Even Branson himself is preparing to walk away, having reportedly invested more than $1bn into the company since it was founded, including around $55m in recent weeks after it ran out of money.
The billionaire’s Virgin group has provided $11m to help to finance severance payments to nearly 800 employees who stand to lose their jobs, and other outstanding costs, in return for securing rights over the company’s Boeing 747 aircraft and other assets if it goes bankrupt.
But it may have all come crashing down without the Cornwall debacle. It was a cheap money era venture that had been burning through cash and would always have struggled to survive in a tougher funding environment, whatever marketing pizazz was attached to it.
It is telling that for all the talk of an outside party providing rescue financing, a high profile figure like Branson has been unable to persuade anyone else to put their hand in their pocket.
As the interest cycle has turned sharply, risk appetite has dramatically waned and investors are increasingly shying away from unproven business models and loss-making start-ups.
His space tourism company Virgin Galactic, which was already struggling to compete with Elon Musk and Jeff Bezos, will now be facing questions about its future. Who would fund it against those two now?
Branson’s dreams of becoming a cosmic pioneer now look like the stuff of pure fantasy.