Virgin Galactic
said it would cut jobs and expenses to focus on producing its lower-cost Delta spaceships.
The stock tumbled 9% in early trading, and has now fallen 55% so far in 2023.
CEO Michael Colglazier said in a memo to employees that high interest rates and geopolitical unrest have made it harder to access near-term capital. He added that the company needs to invest upfront capital in creating a new fleet of ships to profitably scale the business, MarketWatch reported.
“The Delta ships are powerful economic engines. To bring them into service we need to extend our strong financial position and reduce our reliance on unpredictable capital markets,” he added.
Virgin Galactic will divert resources to its Delta ships and reduce work outside the program, he added.
The stock has fallen more than 50% this year despite several successful flights. The company flew three paying passengers on an hour-long journey to space and back in October, its fourth commercial flight.
The company is scheduled to report earnings after the close of trading Wednesday.
Virgin Galactic didn’t respond to a request for comment from Barron’s early Wednesday.
Write to Callum Keown at [email protected]
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