After Selloffs and Stock Drops, Virgin Galactic Continues to Lag in the Private Space Race

2021 was a huge year for the commercial spaceflight industry across the board. Pretty much every company with a huge market share was able to record massive gains throughout the year, although it was evident that some companies racked up more wins than others.

After Selloffs and Stock Drops, Virgin Galactic Continues to Lag in the Private Space Race

Heading into 2022, however, Richard Branson’s Virgin Galactic is in a precarious position. It is a giant in the industry for sure, but it’s not a top player.

Sir Branson is Moving Again

All through 2021, companies like SpaceX and Blue Origin scored the biggest points, thanks in part to their vast resources and connections. Comparatively, Virgin Galactic was unable to make as big a splash as its larger competitors.

Despite being the only large aerospace company to be publicly listed, Virgin Galactic has shown less spark than SpaceX and Blue Origin. The company’s stock is trading pretty low, and its market cap of $3.4 billion is just a blip compared to the other two companies - which are easily worth around $100 billion apiece.

Even worse is the propensity for Virgin’s top shareholders to dump the company’s stock. In November, a regulatory filing confirmed that Virgin’s founder Sir Richard Branson had offloaded another $300 million in the company’s stock.

According to the filing, Branson offloaded 15.6 million shares of Virgin Galactic - worth about $300 million at the time. The funds were reportedly used to support the Virgin Group - Branson’s holding company, which covers the entirety of his leisure and hospitality empire.

Virgin Atlantic’s Woes Spill Over to Virgin Galactic

Branson started Virgin as a mail-order retailer in the early 1970s. Since then, the company has grown to become a global conglomerate, with links to over 40 other companies worldwide. However, the past two years haven’t been so kind. With the coronavirus pandemic ravaging the hospitality and travel industries, Branson has had to prop up his company to keep it afloat.

Virgin Atlantic - the airline brand Branson controls - has been perhaps the hardest hit so far. Branson controls 51 percent of the company and injected £204 million into the company - most likely from his Virgin Galactic stock sale. According to reports, Delta Airlines, the minority shareholder in Virgin Atlantic, also injected £196 million.

The struggle has definitely been real for Virgin Atlantic. The company has had to lay off half of its workers to survive the pandemic, and it suffered a massive loss of $1.1 billion in 2020. While the resumption of flights in 2021 has helped the company, the emergence of the coronavirus omicron variant could put a strain on its finances once more.

Business challenges are definitely understandable. However, considering that Virgin Galactic’s stock is now being affected, this can’t be good for the aerospace company as well.

This isn’t the first time Branson will be selling stock in the company this year. He sold off another $300 million in August, causing a massive stock drop at a difficult time. As well, Chamath Palihapitiya- the company’s board chairman - sold off his entire personal stake (valued at $213 million at the time) in March.

All of these selloffs have cratered Virgin Galactic’s stock price. For the entirety of 2021, Virgin Galactic’s stock will post a loss of about 40 percent.

Is Virgin Galactic Ready for 2022?

Going into 2022, there’s no question that Virgin Galactic is in a wobbly position. Its biggest competitors - SpaceX and Blue Origin - made massive moves in 2021 and are poised to do even bigger things in the new year. On the other hand, the only thing that this company really had going was the fact that it was the first to take a crewed flight to space.

Branson beat Blue Origin founder Jeff Bezos to space in July. In a surprise move, Branson announced that he’d be going to space just a week before Bezos. He might have won that round, but Blue Origin has had the last laugh.

Since the two men went on their respective flights, Blue Origin has been able to run several additional private flights. Actor William Shatner got a ride to space with a crew of his own aboard a Blue Origin vehicle, as did TV show host Michael Strahan. SpaceX, which refrained from participating in the “race to space,” has also launched several private crewed missions.

Virgin Galactic? Just the one.

The other two companies are also gearing up for a big year. SpaceX hopes to start testing its Starship vehicle, while Blue Origin has projects like the Orbital Reef space station and more. Virgin Galactic’s camp is so far pretty silent.

Of course, this isn’t to say that the company doesn’t have plans. But, time is running out for Virgin Galactic. Its stock is cratering, and it will take something huge to turn things around right now.

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