Branson's wallet snaps shut for Virgin Galactic
- Reference: 1701774293
- News link: https://www.theregister.co.uk/2023/12/05/branson_virgin_galactic_funding/
- Source link:
Branson told the [1]Financial Times : "We don't have the deepest pockets after COVID, and Virgin Galactic has got $1 billion, or nearly. It should, I believe, have sufficient funds to do its job on its own."
Virgin Galactic was founded in 2004. Despite setbacks including [2]the crash of VSS Enterprise , the space tourism biz finally managed a [3]suborbital jaunt to the edge of space in 2018 . It [4]performed the feat again a few months later in 2019 before [5]flying Branson and pals in a crewed flight in 2021.
[6]
Branson's flight proved controversial, and [7]attracted the ire of the Federal Aviation Authority (FAA) for venturing outside of its allocated airspace. Other issues have kept Virgin Galactic's suborbital tourism ambitions on the ground until 2023.
[8]
[9]
Things appeared to be looking up this year as the luxury operator began commercial business again after a successful suborbital test flight and approached a near-monthly cadence. But with tickets starting at $450,000 and a maximum of four paying passengers per flight, turning a profit using the VSS Unity spaceplane and VMS Eve carrier aircraft combination is wishful thinking.
[10]Virgin Galactic sends oldest-ever Brit and first mother-daughter duo into space-ish
[11]Virgin Galactic finally gets its first paying customers to edge of space
[12]Virgin Galactic flies final test before opening for business
[13]Virgin Orbit-uary: Beardy Branson's satellite launch biz shutters
To that end, Virgin Galactic is looking to its upcoming Delta class of spaceplane, which can carry up to six passengers. It also expects eight flights – and revenues of between $21.6 million and $28.8 million per ship – per month from the forthcoming class, according to its [14]third quarter 2023 earnings update [PDF].
However, Virgin Galactic will still be burning cash to get there. Revenue guidance for Q4 2023 stood at $3 million, while its cash flow was expected to be between $125 and 135 million. Virgin Galactic will also be switching to a quarterly cadence before pausing flights of VSS Unity in mid-2024 to focus on building the Delta ships.
Why the need to pause? As well as calling a halt to unprofitable flights, this is likely due, at least in part, to staff cuts [15]announced by boss Michael Colglazier. All told, approximately 185 employees – around 18 percent of the workforce – are to leave the building as the biz seeks to cut costs and focus on what is most likely to make money: the Delta class spaceplanes.
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Those employees will not be alone. While Branson told the FT he was "still loving" the Virgin Galactic project, that love does not appear to extend to the entrepreneur's wallet.
His other rocket startup, [17]Virgin Orbit , perished earlier this year. ®
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[1] https://www.ft.com/content/9fbf47ef-cc9d-4f20-bbf9-24e2d11d4a83
[2] https://www.theregister.com/2014/11/03/virgin_galactic_spaceshiptwo_feathering_device_deployed_accidentally_tragic_crash/
[3] https://www.theregister.com/2018/12/13/virgin_galactic_gets_to_space_for_first_time/
[4] https://www.theregister.com/2019/02/25/space_round_up/
[5] https://www.theregister.com/2021/07/12/virgin_galactic_successful_crewed_flight/
[6] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/science&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2ZW9XOGlOlZaS4Dp6MQro8AAAAJA&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[7] https://www.theregister.com/2021/09/30/virgin_galactic_faa/
[8] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/science&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZW9XOGlOlZaS4Dp6MQro8AAAAJA&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[9] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/science&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ZW9XOGlOlZaS4Dp6MQro8AAAAJA&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[10] https://www.theregister.com/2023/08/11/virgin_galactic_02/
[11] https://www.theregister.com/2023/06/29/virgin_galactic_launch/
[12] https://www.theregister.com/2023/05/26/virgin_galactic_pulls_off_last/
[13] https://www.theregister.com/2023/05/24/virgin_orbit_ceases_ops/
[14] https://s29.q4cdn.com/417755062/files/doc_presentations/2023/11/Final-Q3-2023-Earnings-Presentation-11-8-23.pdf
[15] https://investors.virgingalactic.com/news/news-details/2023/Virgin-Galactic-Provides-Business-Update/default.aspx
[16] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/science&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZW9XOGlOlZaS4Dp6MQro8AAAAJA&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[17] https://www.theregister.com/2023/05/24/virgin_orbit_ceases_ops/
[18] https://whitepapers.theregister.com/
Re: So, Branson is folding
I do wonder what the original business plan looked like that would make it profitable in X years.
Re: So, Branson is folding
The business plan was simple and followed the same old and predictable Beardie routine. Do a few PR stunts. Get the all too gullible media to hype the latest scam. Sell out to some gullible mug(s) before the shit hits the fan. Make off with all the loot to his tax haven in the Caribbean. Rinse and repeat ad finitum.
Re: old business plan
Wildly optimistic budgets and timelines for aerospace projects. (Carrier aircraft and a space plane.)
Getting New Mexico tax payers to build and maintain a spaceport.
Not accounting for how quickly rocket engine vibration cracked the composite materials available at the time.
Expecting a rapid cadence incompatible with the maintenance requirements of a hybrid rocket.
I am sure with their hard earned experience and large cash reserves they will make a better vehicle this time. I do not see how even an excellent vehicle could pay back much of that cash given the competition that will be ready by the time they are.
Been there, done that. Did he get a T-shirt?
Oh no!
Anyway, moving on.
the not so royal we
Branson told the Financial Times: "We don't have the deepest pockets"
What's this "we" shit? Why can't Beardie simply tell the truth, ie him and his companies aren't putting any more money in?
Beardie is always using the pronoun we to refer to himself to give the impression it was someone else (and not) him who has quit or failed. "We've taken the stellar success of Vigin Music/Cola/Brides/Trains/Media/etc as far as we can, so now we're bailing out".
Re: the not so royal we
Maybe because his companies aren't "his" and he has shareholders to please?
Re: the not so royal we
"We" = Virgin Group Limited
Re: the not so royal we
Virgin Group Limited is a private company. Companies House says it has just 1 shareholder with significant control - Virgin Holdings Ltd. Which has exactly 1 person with significant control: Beardie.
So in this case "we" == Beardie.
Re: the not so royal we
Billionaires like to perpetuate the myth that they are paying for these things themselves when it is really investors doing the heavy lifting. SpaceX isn't funded by Musk but billions and billions from investors. Throw in a small fraction of the money for a large fraction of the ownership. It is a trickier dance for publicly traded companies as it is easier for investors to pull the rug out from beneath you.
I hate to say it ...... but ....
"Beardie is always using the pronoun we to refer to himself to give the impression it was someone else (and not) him who has quit or failed. "We've taken the stellar success of Vigin Music/Cola/Brides/Trains/Media/etc as far as we can, so now we're bailing out"."
The art of getting rich and staying rich is to *know* when to bail out *before* the losses hit !!!
Branson is no different to any other rich serial investor and the whole financial world works on the same basis .... stay while the *profits* are made and bail before the *losses* hit !!!
The trading of Stocks/Shares/Financial instruments of all shapes & sizes is based on exactly the same priniciple ..... and there are plenty of 'Mug punters' who think they are 'wise' to off-load the goods on before you make a loss !!!
:)
Surely the answer is just to put the prices up. If you're paying 450k for a ticket, surely another 100k isn't going to trouble you. Otherwise why are you paying to go into space in the first place? People who have that kind of money tend to have more of it lying around. They then have a choice of whether to go or not, as no doubt there will be plenty of other rich people who will take their place.
You might as well spend a bit more and book a flight on one of Space Karen's equipment, and actually get to orbit.
No profit in the future
Flying to space for a fun ride isn't something that's profitable.
They need to figure out how they can actually use this for something meaningful. So far this has been the equivalent of barnstorming flights of the very early aviation and the interest won't last long, especially when Space Karen offers actual flights to space station or the orbit.
The beardie and his company need to find their niche first.
Commend
I think we should commend Branson for investing in space tourism. And the company has shown that it's feasible to take private individuals into space (although not above the Karman line) and that a space tourism sector could potentially evolve.
However, having said that, huge investment is needed and the returns are too meager to build a business on. I therefore believe most space tourism companies will close their doors in the coming years. Only orbital tourism for the ultra-wealthy will continue to flourish.
Self-indulgent ...
techno-orgasm comes down to earth.
Credit where Credit is Due
Give Bransom some credit for getting this venture off the ground. He has no obligation to fund this business indefinitely.
There's no ticket price for going to orbit yet, and once there is, it will be at least 100x as expensive. There's a significant slice of population who can afford a $500k joyride, but not a $50M one.
I'm not part of either slice, and even though Branson says that he doesn't have the deepest pockets anymore, I'd still be happy to trade him for mine.
Branson's wallet
Isn't that a disease of Shatner's Bassoon?
So, Branson is folding
Apparently, erecting massive, uh, rockets, yeah rockets, doesn't do it for Branson anymore.
Typical billionnaire. He got what he wanted, now he's no longer interested.