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4 Dec, 2023
1 min time to read

Virgin Galactic faced a significant setback in early trading on Monday as shares plummeted over 10%, following British billionaire Richard Branson's declaration that he would not be injecting further funds into the company.

In an interview with the Financial Times published on Sunday, Branson emphasized that his business empire, including Virgin Galactic, no longer boasts the financial resilience it once did in the wake of the Covid-19 pandemic. He stated that Virgin Galactic should now rely on its existing resources to fulfill its objectives.

As of 10 a.m. ET on Monday, Virgin Galactic shares had experienced a decline of approximately 12.5%.

The company, founded by Branson in 2004, recently chose a cost-cutting strategy, which involves job cuts and the suspension of commercial flights until mid-2024. These measures are aimed at accumulating funds to develop the Delta spacecraft, designed to take passengers past the edge of space.

Virgin Galactic estimates that its current funding will sustain operations until 2026, coinciding with the projected launch of the Delta spacecraft.

Despite the reduction in Branson's investment commitment, Virgin Investments retains its position as the second-largest shareholder in Virgin Galactic, holding a 7.69% stake. State Street Global Advisors maintains the lead with an 8.43% holding, according to data from the London Stock Exchange Group.