Virgin Orbit Holdings Inc. (NASDAQ: VORB) launched another spaceship. That launch failed, so Virgin became an also-ran in the race to put people and satellites into space. Management called the problem an “anomaly.” According to them, that translates into the problem encountered when their ship fails on its mission while going at 11,00 miles per hour and in the middle of the firing of its second-stage engine. (Check out 25 of the worst disasters in space flight history.)
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Virgin Orbit competes against wildly successful SpaceX, which plans to launch scores of rockets this year. None have failed recently. Even NASA trusts their effectiveness and safety.
One trouble surrounding the problem at Virgin Orbit comes from management’s attempt to turn failure into success. After it became clear the rocket malfunctioned, they issued a press release that said, “Though the mission did not achieve its final orbit, by reaching space and achieving numerous significant first-time achievements, it represents an important step forward.” This does more than stretch the imagination. Management should have at least described the catastrophe for what it was.
The news made Virgin Orbit’s stock fall apart. It dropped over 30% in the premarket after a decline of 8% on the previous day. This pushed the price to $1.48, against a 52-week high of $11.28. Its SPAC merger in December 2021 was essentially its initial public offering.
Virgin Orbit’s most recent financial results showed the company had trouble that began well before the failed launch. Revenue disappointed at $30 million, and the company lost $44 million. Virgin Orbit reported a cash balance of $71 million on September 30.
Look up the phrase “lipstick on a pig.”
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