Virgin Orbit pauses operations and furloughs staff

[brussell]

Not sure it was ever financially viable launch business especially with new 1000t class LVs now flying and priced same per launch. Air launch does give them some unique mission options but probably not enough to sustsin business.

To be fair if they had actually launched in 2016 I think they would have been okay. The market just evolved a lot in the 5 years they were delayed and they didn’t evolve with it.

You can say that again. Their original design had the same payload capacity as Electron, had stuck to that design they would've own Rocket Lab's market share.

I don't think so. They'd still be several times more expensive.

[mn]

Not sure it was ever financially viable launch business especially with new 1000t class LVs now flying and priced same per launch. Air launch does give them some unique mission options but probably not enough to sustsin business.

To be fair if they had actually launched in 2016 I think they would have been okay. The market just evolved a lot in the 5 years they were delayed and they didn’t evolve with it.

You can say that again. Their original design had the same payload capacity as Electron, had stuck to that design they would've own Rocket Lab's market share.

It seems like rocket lab would be on he ropes too if not for their other businesses.
So owning their market share would not necessarily have helped (unless they also had the good management foresight to buy those companies that rocket lab bought)

[ringsider]

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On March 15, 2023, the Compensation Committee of the Board of Directors of Virgin Orbit Holdings, Inc. (the “Company”) adopted and approved the Company’s Executive Change in Control Severance Plan (the “Severance Plan”), effective March 15, 2023.

The Severance Plan provides for severance payments and benefits in the event of a qualifying termination during the 12-month period following a change in control of the Company, as follows:

(i) a cash severance payment equal to 100% (200% with respect to the Company’s Chief Executive Officer) of the executive’s base compensation;

(ii) a cash payment equal to the executive’s pro-rated target annual bonus for the year of termination;

(iii) up to six months’ COBRA coverage; and

(iv) full accelerated vesting of time-vesting Company equity awards and accelerated vesting of performance-vesting Company equity awards at the “target” level achievement of applicable performance metrics.

Initial participants in the plan include

Daniel Hart (the Company’s Chief Executive Officer)
Jim Simpson (the Company’s Chief Strategy Officer)
Tony Gingiss (the Company’s Chief Operating Officer).

The foregoing summary of the Severance Plan is not complete and is qualified in its entirety by reference to the full text of the Severance Plan, a copy of which is attached as Exhibit 10.1 to this Current Report on Form 8-K and incorporated in this Item 5.02 by reference. Any capitalized term used and not defined in this Item 5.02 shall have the same meaning set forth in the Severance Plan.

[FST edit: link to SEC filing
https://ir.stockpr.com/virginorbit/sec-filings-email/content/0001843388-23-000040/vorb-20230315.htm

Also I’ve merged this with the existing furlough thread. I think one thread is enough to cover the potential death throes of Virgin Orbit ]

[FutureSpaceTourist]

https://twitter.com/thesheetztweetz/status/1637848803045699587

The latest on Virgin Orbit $VORB, as leadership continued to talk with investors through the weekend to find a funding lifeline – but restructuring contingency planning is already underway, with bankruptcy possible as soon as this week, CNBC sources say:

https://www.cnbc.com/2023/03/20/virgin-orbit-looming-bankruptcy-deal-talks.html

KEY POINTS

Virgin Orbit senior leadership held daily talks with potential investors through the weekend, people familiar with the matter told CNBC.

One possible buyer balked at a proposed sale price of near $200 million, one person told CNBC – a price just below the company’s market value as of Friday’s close.

Meanwhile contingency planning is underway for a potential bankruptcy filing as soon as this week.

[Svetoslav]

What's the financial situation of the sister company, Virgin Galactic?

[FutureSpaceTourist]

What's the financial situation of the sister company, Virgin Galactic?

Covered in separate thread: https://forum.nasaspaceflight.com/index.php?topic=48515.0

Based on the latest results, not great. Although seems to have enough cash to keep going for a while (1 to 2 years).

[russianhalo117]

What's the financial situation of the sister company, Virgin Galactic?

Covered in separate thread: https://forum.nasaspaceflight.com/index.php?topic=48515.0

Based on the latest results, not great. Although seems to have enough cash to keep going for a while (1 to 2 years).

Might not be applicable in the future as the Virgin Group Holdings parent has sent out a preliminary notice to multiple Virgin brand entities  (subsidiaries, outright owned companies and majority interest controlled companies) of an upcoming consolidation and brand wide major reorganisation due to other Virgin branded entities.

[trimeta]

https://twitter.com/thesheetztweetz/status/1637848803045699587

The latest on Virgin Orbit $VORB, as leadership continued to talk with investors through the weekend to find a funding lifeline – but restructuring contingency planning is already underway, with bankruptcy possible as soon as this week, CNBC sources say:

https://www.cnbc.com/2023/03/20/virgin-orbit-looming-bankruptcy-deal-talks.html

KEY POINTS

Virgin Orbit senior leadership held daily talks with potential investors through the weekend, people familiar with the matter told CNBC.

One possible buyer balked at a proposed sale price of near $200 million, one person told CNBC – a price just below the company’s market value as of Friday’s close.

Meanwhile contingency planning is underway for a potential bankruptcy filing as soon as this week.

Of particular note:

Virgin Orbit has been looking for a financial lifeline for several months. Branson was not willing to fund the company further, people familiar said, and instead shifted strategy to salvaging value.

If Branson himself isn't looking to save the company, I don't know who else would.

[Svetoslav]

Apparently space isn't a cash cow for Branson... Smallsat launches did look to be one for a time, though. But as Rocket Lab's CFO Spice says, everybody seriously overestimated the market - themselves included.

[Tomness]

Apparently space isn't a cash cow for Branson... Smallsat launches did look to be one for a time, though. But as Rocket Lab's CFO Spice says, everybody seriously overestimated the market - themselves included.

Gwen has said that since Falcon 1,  they would have continued to fly Falcon 1 if it made them money.  But the Nasa resupply is what saved them.

[Svetoslav]

Gwen has said that since Falcon 1,  they would have continued to fly Falcon 1 if it made them money.  But the Nasa resupply is what saved them.

Theoretically, a smallsat rocket may work - but the cost has to be $250 000 per 50 kilos - about the starting price of Transporter.

Whether such rocket is possible, I don't know. Maybe. A two or three stage solid rocket like the ones produced in China, who knows. Not sure.

[DeimosDream]

Gwen has said that since Falcon 1,  they would have continued to fly Falcon 1 if it made them money.  But the Nasa resupply is what saved them.

Theoretically, a smallsat rocket may work - but the cost has to be $250 000 per 50 kilos - about the starting price of Transporter.

Whether such rocket is possible, I don't know. Maybe. A two or three stage solid rocket like the ones produced in China, who knows. Not sure.

Small lift can charge some premium for dedicated placement, and the F9-rideshare pretty much only goes to SSO. Anyone who cares about their orbit has to pay extra for either a dedicated rocket or maybe a space tug if SSO gets them close. For instance, news reports suggests Launcher's Orbiter goes for ~$4.4M for 400kg, or $11k/kg when launched as part of an F9 transporter rideshare. Come to think of it, that price/capacity point also lines up with India's promises for their SSLV.

LauncherOne is an example of how -not- to compete. They gambled hard that air-launch had unfilled demand, and when that fell through ended up:
1) competing in the same region (North American) as another micro-lift rocket (Electron)
2) using a rocket that was more expensive per flight ($12M vs $7.5M)
3) and more expensive per kg ($40k/kg SSO vs $37.5k/kg SSO on Electron)
4) while failing to demonstrate they could actually carry anything close to their promised capacity of 500kg LEO / 300kg SSO.

[ringsider]

VORB is valued at $173m today, with an operational launch solution.

ASTR is at $107m, with a sometimes operational launch solution.

Imagine being a launch firm that raised say $200m at a valuation of approx. $500m in 2021, racing to deploy it as fast as possible, and then going out to look for another $200m right about now....

Launch firm: We need another $200m to finish the job.
Investor: I can buy Virgin Orbit for less than that, and it is working today.
Launch firm: We have t-shirts.
Investor: They have customer contracts.
Launch firm: We are vertical not horizontal. Proper rockets.
Investor: I can buy Astra for $100m. They work from time to time.
Launch firm: We are nice guys.
Investor: Branson invited me to Necker Island.
Launch firm: We have 90K Twitter followers.
Investor: Literally my pet cat has more.

[niwax]

Gwen has said that since Falcon 1,  they would have continued to fly Falcon 1 if it made them money.  But the Nasa resupply is what saved them.

Theoretically, a smallsat rocket may work - but the cost has to be $250 000 per 50 kilos - about the starting price of Transporter.

Whether such rocket is possible, I don't know. Maybe. A two or three stage solid rocket like the ones produced in China, who knows. Not sure.

Small lift can charge some premium for dedicated placement, and the F9-rideshare pretty much only goes to SSO. Anyone who cares about their orbit has to pay extra for either a dedicated rocket or maybe a space tug if SSO gets them close. For instance, news reports suggests Launcher's Orbiter goes for ~$4.4M for 400kg, or $11k/kg when launched as part of an F9 transporter rideshare. Come to think of it, that price/capacity point also lines up with India's promises for their SSLV.

How much have we actually seen of that price premium over other options? For example, Capella has launched on Electron since 2020, a full year before Transporter started. I addition, the average revenue on launches of $6.7 million each in 2022 ($60 million/9 launches) was *below* base list price, even though they had some complex NASA launches and now put a third stage on every vehicle even though it was originally put as an add-on.

CAPSTONE alone was $10 million, so any guess on what those dedicated commercial launches were signed for? $5 million with a free kick stage in a world where Transporter was not up and running? To torture an old quote, "A few more wins like that and the war may be lost".

[trimeta]

Gwen has said that since Falcon 1,  they would have continued to fly Falcon 1 if it made them money.  But the Nasa resupply is what saved them.

Theoretically, a smallsat rocket may work - but the cost has to be $250 000 per 50 kilos - about the starting price of Transporter.

Whether such rocket is possible, I don't know. Maybe. A two or three stage solid rocket like the ones produced in China, who knows. Not sure.

Small lift can charge some premium for dedicated placement, and the F9-rideshare pretty much only goes to SSO. Anyone who cares about their orbit has to pay extra for either a dedicated rocket or maybe a space tug if SSO gets them close. For instance, news reports suggests Launcher's Orbiter goes for ~$4.4M for 400kg, or $11k/kg when launched as part of an F9 transporter rideshare. Come to think of it, that price/capacity point also lines up with India's promises for their SSLV.

How much have we actually seen of that price premium over other options? For example, Capella has launched on Electron since 2020, a full year before Transporter started. I addition, the average revenue on launches of $6.7 million each in 2022 ($60 million/9 launches) was *below* base list price, even though they had some complex NASA launches and now put a third stage on every vehicle even though it was originally put as an add-on.

CAPSTONE alone was $10 million, so any guess on what those dedicated commercial launches were signed for? $5 million with a free kick stage in a world where Transporter was not up and running? To torture an old quote, "A few more wins like that and the war may be lost".

We can actually go through Rocket Lab's 10-Q and 10-K filings to find their revenue per launch, using the total revenue in the Launch segment divided by the number of launches:

Quarter	# of Launches	Revenue	Revenue/Launch
2023Q1 (projected)	3	$19M	$6.333M
2022Q4	2	$12.018M	$6.009M
2022Q3	3	$22.983M	$7.661M
2022Q2	3	$19.109M	$6.37M
2022Q1	1	$6.576M	$6.576M
2021Q4	2	$13.769M	$6.885M
2021Q3	1	$1.123M	$1.123M
2021H1	3	$24.079M	$8.026M

So no real consistency year-over-year, but we do know that a number of launches have been explicitly called out as having been sold for under the $7.5M benchmark since they were some sort of technology demonstration: the January 2023 launch, the November 2022 launch, the May 2022 launch, demonstrably the February 2022 launch, probably the March 2021 launch. I guess it feels to me less like "their actual sticker price is below $7.5M" and more like "their sticker price is $7.5M, but 'special circumstances' can lead to discounts...and in practice those circumstances come up rather frequently." Which I suppose amounts to the same thing.

[meekGee]

Apparently space isn't a cash cow for Branson... Smallsat launches did look to be one for a time, though. But as Rocket Lab's CFO Spice says, everybody seriously overestimated the market - themselves included.

Not everybody.  Only those that wanted really hard to convince themselves.

Small sats make sense in swarms/constellations. Constellations should be launched in large batches, that's part of the allure.

Building a business case on sending hot spares or other one-off scenarios never made sense to me.

I'm thrilled that RocketLab got past the hump and is able to provide unique extra value at the mini-scale to keep up, but even they need their upwards-looking future plan.

[ringsider]

We can actually go through Rocket Lab's 10-Q and 10-K filings to find their revenue per launch, using the total revenue in the Launch segment divided by the number of launches:

Quarter	# of Launches	Revenue	Revenue/Launch
2023Q1 (projected)	3	$19M	$6.333M
2022Q4	2	$12.018M	$6.009M
2022Q3	3	$22.983M	$7.661M
2022Q2	3	$19.109M	$6.37M
2022Q1	1	$6.576M	$6.576M
2021Q4	2	$13.769M	$6.885M
2021Q3	1	$1.123M	$1.123M
2021H1	3	$24.079M	$8.026M

Those prices per launch are misleading / bumpy as there will be various revenue-recognition milestones on the revenue side.

So even if the launch happened in a certain period, they will have been paid some portion of it in 1-2-3 milestones before launch and some portion at launch.

The clue is the Q3 2021 $1.123m number - that is not a payment for a singular launch in that quarter, that is more probably just the final instalment on that specific launch, while they got paid the bulk of it in previous periods as prepayments against various delivery milestones on the path to launch. $1.123m is almost exactly 25% of $4.5m.

Also Q1 2022 with one launch, at $6.576m is almost certainly a combination of prepayments for forthcoming launches plus the final payment on that launch. You could probably model it out fairly easily.

That's not to say there isn't variability in average price - there is. The 2023 10K states:

"For the years ended December 31, 2022, 2021 and 2020, our revenue value per launch was $6.7 million, $8.1 million and $5.5 million, respectively. Meanwhile, cost per launch was $7.5 million, $9.2 million and $6.5 million for the years ended December 31, 2022, 2021 and 2020, respectively. The decrease in cost per launch in the year ended December 31, 2022 was driven by efficiencies of scale due to increased build rate and launch cadence. The increase in cost per launch in the year ended December 31, 2021 was driven by stock based compensation charges related to the Business Combination as well as lowermanufacturing absorption driven by COVID-19 impacts"

[FutureSpaceTourist]

RocketLab has its own finances thread. Let’s get back to where Virgin Orbit is and what, if anything, it can do next. The point that it is difficult to make money with a small launch vehicle has been well made.

[FutureSpaceTourist]

https://twitter.com/shorealonefilms/status/1638012386941751296

Virgin Orbit's Boeing 747-400, "Cosmic Girl" at Long Beach Airport. Her fate doesnt look good. per CNBC. The latest on Virgin Orbit, as leadership continued to talk with investors through the weekend to find a funding lifeline 03-20-23

https://twitter.com/shorealonefilms/status/1638011971269435394

MORE:
Sad sight to see @ #VirginOrbit today…   #AlmostEmptyParkingLot #SadSpace 03-20-23

[imprezive]

Note from moderator, Future Space Tourist said it above, This thread is about Virgin Orbit