US Markets
Monday, December 4th, 2023 3:48 pm EDT
Key Points
- Virgin Galactic Shares Plunge: Virgin Galactic shares experienced a significant drop of over 10% in early Monday trading. This decline followed British billionaire Richard Branson’s statement that he will not make additional investments in the company.
- Branson Rules Out Further Investment: In an interview with the Financial Times, Branson mentioned that his business empire, including Virgin Galactic, no longer possesses the financial strength it once had, attributing this change to the impact of the Covid-19 pandemic. He emphasized that Virgin Galactic should be financially self-sufficient and have “sufficient funds to do its job on its own.”
- Financial Challenges and Cost-Cutting Measures: Virgin Galactic, founded by Branson in 2004, recently announced job cuts and the suspension of commercial flights for 18 months by mid-2024. These cost-cutting measures are part of a broader plan to save cash for the development of a larger spacecraft named Delta, designed to take passengers beyond the edge of space. Virgin Galactic estimates that its current funding will last until 2026, coinciding with the scheduled entry of Delta into service. Despite Branson’s decision to refrain from further investment, Virgin Investments remains the second-largest shareholder in Virgin Galactic with a 7.69% holding, following State Street Global Advisors with an 8.43% stake.
Richard Branson, British billionaire and founder of Virgin Galactic, announced in an interview with the Financial Times that he will not make further investments in the company. Branson stated that his business empire no longer has the financial capacity it once did due to the impact of the Covid-19 pandemic. He expressed the belief that Virgin Galactic should be financially self-sufficient. Following this announcement, Virgin Galactic shares experienced a more than 10% plunge in early trading. The company recently revealed cost-cutting measures, including job cuts and the suspension of commercial flights for 18 months by mid-2024. These measures are part of a strategy to conserve cash for the development of a larger spacecraft named Delta, designed to take passengers beyond the edge of space. The current funding is anticipated to last until 2026 when Delta is slated to enter service. Despite Branson’s decision to refrain from additional investment, Virgin Investments remains the second-largest shareholder in Virgin Galactic with a 7.69% holding, following State Street Global Advisors with an 8.43% stake.
For the full original article on CNBC, please click here: https://www.cnbc.com/2023/12/04/virgin-galactic-shares-plunge-in-premarket-after-branson-rules-out-further-investment.html
