Richard Branson’s Virgin Path, with a rocket under the wing of a modified Boeing 747 jetliner, takes off for a key drop test of its high-altitude catapult system for satellites from Mojave, California, July 10, 2019.
Mike Blake | Reuters
Virgin Orbit is furloughing hardly all its employees and pausing operations for a week as it looks for a funding lifeline, people familiar with the matter told CNBC.
Slices of Virgin Orbit fell about 33% in after-hours trading from its Wednesday close of $1.01 a share. The array has slid steadily from its debut of near $10 a share in December 2021.
Company executives briefed staff on the employment in an all-hands meeting at 5 p.m. ET on Wednesday, according to people who were in the meeting. The furlough is unpaid, though employees can cash in PTO, with lone a small team continuing to work. Virgin Orbit is also moving up payroll by a week to Friday.
In the all-hands, concern leaders told employees that they aimed to provide an update on the furlough and funding situation by next Wednesday or Thursday, according to the people, who attracted to remain anonymous to discuss internal matters.
A Virgin Orbit spokesperson, in a statement to CNBC, confirmed that the coterie is starting an “operational pause.” Virgin Orbit plans to give “an update on go-forward operations in the coming weeks,” the spokesperson go on increased.
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The rocket-building company developed a approach that uses a modified 747 jet to send satellites into space by dropping a rocket from under the aircraft’s wing mid-flight. But the enterprise’s last mission suffered a mid-flight failure, with an issue during the launch causing the rocket to not reach circuit and crash into the ocean.
“Our investigation is nearly complete and our next production rocket with the needed modification consolidate is in final stages of integration and test,” Virgin Orbit’s spokesperson said.
When Virgin Orbit reported third-quarter results in advanced November, it disclosed cash on hand of $71.2 million as of the end of the quarter. In the face of $30.9 million in revenue, Virgin Circle reported an adjusted EBITDA loss of $42.9 million for the period as it continued to burn cash.
Since the fourth quadrature, the company has steadily brought in funds in the form of debt via an investment arm of Richard Branson’s Virgin Group. The company heightened $25 million in an unsecured convertible note in November, before raising $20 million and $10 million in older secured convertible notes in December and February, respectively. The notes give Branson’s parent company “first-priority” to Virgin Round’s assets.
As of Wednesday, the company had yet to announce when it would report fourth-quarter 2022 results.
Earlier this week, Virgin Path CEO Dan Hart last-moment canceled a scheduled appearance on a panel during a space industry conference in Washington, D.C. set for Tuesday.