Virgin Galactic: Hopes higher than orbit?
Virgin Galactic appears to have fallen behind in the space race renaissance, despite its ambitions.
Richard Branson’s (below) space venture kicked off the year with the loss of its inaugural chairman, Chamath Palihapitiya, just one month after Palihapitiya was thrown into controversy for claiming “nobody cares” about human rights abuses against Uyghur Muslims in China.
The leadership shuffle followed Branson’s own step back from the space unit, with the British billionaire reducing his stake in May 2020 to prop up his other businesses, such as a pandemic beleaguered Virgin Atlantic.
The company has also been hit by escalating competition, with Jeff Bezos’ Blue Origin making significant strides in the space tourism sector and Elon Musk’s SpaceX forging commercial relationships with NASA.
Galactic’s stock is down over 38 per cent in the year to date.
“Shares in Virgin Galactic have plunged back down to earth since December after appearing to lag behind the progress of Blue Origin’s tourist programme in successful missions,” Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, explained.
Branson was the first of the billionaire founders to ride his own spacecraft, intended to give a vote of confidence in the venture.
However, more management changes and a distant founder have spelled “uncertainty” surrounding the firm, Paolo Pescatore, a tech analyst at PP Foresight, told City PM
Just days ago, Virgin Group veteran Patrick McCall, who led both Virgin Galactic and its spin-off satellite firm Virgin Orbit into public markets, left his role at the Branson-led group for Seraphim Space Investment Trust.
McCall’s exit comes amid a slow period for the company, following Galactic’s gilded launch last year.
And although launching activity is expected to pick up with commercial services hoped to begin later this year, the costs of growing its fleet in preparation is expected to put a dampener on earnings, which could further deter investors.