Virgin Galactic shares plunge after Branson rules out further investment

In this photo illustration, British billionaire Richard Branson is seen on a fragment of a Virgin Galactic Unity 22 Spaceflight Livestream Youtube video displayed on a smartphone with the Virgin Galactic logo in the background.

Pavlo Gonchar | Lightrocket | Getty Images

Virgin Galactic shares plunged more than 10% in early trading Monday, after British billionaire Richard Branson ruled out further investment in the company.

In an interview with the Financial Times published Sunday, Branson said that his sprawling business empire no longer has “the deepest pockets” in the wake of the Covid-19 pandemic, adding that Virgin Galactic should have “sufficient funds to do its job on its own.”

As of around 10 a.m. ET, Virgin Galactic shares were down about 12.5%.

The company, founded by Branson in 2004, last month announced job cuts and the suspension of commercial flights for 18 months by mid-2024.

The cost-cutting is part of a plan to save cash to develop a larger spacecraft, dubbed Delta, that aims to take passengers past the edge of space. The group estimated that its current funding would carry it through to 2026, when Delta is scheduled to enter service.

Virgin Investments remains the second-largest shareholder in Virgin Galactic, according to LSEG data, with a 7.69% holding, behind the 8.43% of State Street Global Advisors.

Source: CNBC