Tag: Virgin Galactic

Virgin Galactic delays first flight of its new suborbital craft while cutting workforce

10:50 am

Virgin Galactic has trimmed its work force by 7% even as it announced a delay in the first flight of its new Delta suborbital spacecraft from this summer to the fall.

Virgin Galactic Holdings Inc. cut 7% of its workforce as it works to bring to market an upgraded spaceplane central to its plans to expand suborbital tourism and research operations.

The Richard Branson-founded company plans to resume private space tourism trips in the autumn of 2026 after its Delta spacecraft’s first commercial flight, a research mission that was delayed from summer 2026 to also occur in the fall.

It still remains to be seen whether the business model for suborbital hops is viable and profitable. Blue Origin’s New Shepard has been flying somewhat regularly, and appears to have a customer base, but whether it is making a profit remains unknown. Virgin Galactic is deep in the red, and has done no flights for several years as it builds a new spacecraft. Both face stiff competition from the orbital market, which offers a much better product though at a much higher price.

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After only seven commercial flights, Virgin Galactic retires Unity

9:33 am

The delays have never really ended: After only seven commercial flights (the most recent this past weekend), Virgin Galactic has now retired its Unity suborbital spacecraft, and will cease flights for two years while it builds a new generation suborbital craft.

Virgin Galactic flew the last commercial flight of Virgin SpaceShip (VSS) Unity yesterday. Future suborbital trips will have to wait until the new Delta-class spaceships are ready in 2026. They can carry six passengers instead of four, increasing revenue. This flight, Galactic 07, took a Turkish researcher and three private individuals across the imaginary line that separates air and space for a few minutes of weightlessness.

Founded in 2004 and largely funded by Sir Richard Branson as part of his Virgin Group, Virgin Galactic is still trying to demonstrate that commercial suborbital human spaceflight can be a profitable business. Last year Branson told the Financial Times he would stop investing in Virgin Galactic, putting pressure on CEO Michael Colglazier to cut costs and focus on getting the Delta version flying. After all these years of waiting to fly commercial passengers,VSS Unity will stop after just one year and seven commercial flights.

Branson had promised that Virgin Galactic would be flying hundreds of times per year by the mid-2000s. Didn’t happen. Virgin Galactic took deposits from hundreds (it claimed), but even now has only flown 30 people on those seven flights, many of whom have been recent customers, not the many original supporters. That’s the sum total of all of Richard Branson’s achievement with this company in two decades.

Now, with Branson out of the picture, the new management has to redo everything again, because what Branson designed was not profitable. I have serious doubts the company will fly again in 2026.

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A pin falls off Virgin Galactic’s mother ship during most recent passenger flight

9:14 am

Virgin Galactic has notified the FAA that a pin fell off its Eve mother ship, carrying its SpaceShipTwo Unity suborbital spacecraft, during most recent passenger flight on January 26, 2024.

Virgin Galactic said the alignment pin fell from its VMS Eve mothership aircraft, the plane that carries VSS Unity aloft. The pin is used to ensure Unity is aligned to Eve when mated during preflight preparations. After takeoff, the pin helps transfer drag loads from Unity into the pylon and center wing section of the aircraft. The alignment pin detached after Unity separated from Eve, although the company did not state how long afterwards the pin came off. The pin, along with a separate shear pin fitting assembly, do not play a role in flight activities after the release of the spaceplane.

The FAA states it will do an investigation before permitting more flights, but we know from a recent GAO report that it does no such thing. It simply observes the investigation by the company involved, and then rubber stamps it afterward. Nor is this wrong, as no one at the FAA is qualified to do such investigations, unlike the engineers at the company.

The investigation however might impact the next flight. The company has said it intends to end flights using Unity after then next three, and then stand down as it replaces it with its next generation spacecraft. This incident might force that stand-down to occur sooner.

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Virgin Galactic trims staff and spending

9:08 am

Despite having completed its fifth commercial suborbital flight on November 2, 2023, Virgin Galactic announced yesterday that it is laying off staff and cutting spending.

The number of people laid off was not revealed. Supposedly the company has done this as part of its effort to develop an upgraded version of SpaceShipTwo.

The company reported having $980 million of cash and equivalents on hand at the end of the second quarter this year, when it reported a net loss of $134.4 million. The company has not disclosed its estimated costs for development of the Delta vehicles, but said it expected those vehicles to enter service in 2026. The company expects only limited revenue from VSS Unity, which is able to fly monthly carrying up to four customers at a time.

I instead suspect that demand for suborbital flights is dwindling because of the competition from orbital operations. Had this company started flying a decade ago, as promised numerous times by Richard Branson, it would have been ahead of the curve. It didn’t and thus missed the boat.

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Virgin Galactic sets Oct 5th launch date for its fifth commercial suborbital flight in ’23

4:47 pm

Virgin Galactic today announced that the launch window for its fifth commercial suborbital flight this year and ninth overall will open on Oct 5th.

The flight will include three private passengers, two Americans and one Pakistani, and a crew of five Virgin Galactic employees.

At this point I don’t consider these suborbital flights to be very newsworthy. However, I decided to highlight this news release because of its stark contrast with Blue Origin. Even before last year’s mishap that grounded Blue Origin’s own suborbital spacecraft, New Shepard, it never flew this frequently. Virgin Galactic took far too long to begin flying (two decades), but it does appear that is now wasting no time trying to catch up.

Blue Origin meanwhile continues to drift along, accomplishing little and appearing to do even less with time.

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New Shepard remains grounded, a year after launch failure

9:24 am

More than five months after completing its mishap investigation of the New Shepard launch failure one year ago, Blue Origin’s suborbital spacecraft remains grounded, with no clear indication when it will fly again.

In March, Blue Origin announced the results of its anomaly investigation: The nozzle on the first stage’s single BE-3PM engine suffered a “thermo-structural failure,” which caused a thrust misalignment and brought the mission to a premature end.

In its March 24 announcement, Blue Origin said that it had begun implementing some corrective actions, “including design changes to the combustion chamber and operating parameters, which have reduced engine nozzle bulk and hot-streak temperatures.” The company also stressed that it expected to return to flight “soon,” with a re-launch of those same 36 research payloads.

Almost six months later, that “soon” has translated into “someday.” It seems the slow pace of everything Blue Origin does has now taken over its one successful operational product. It has released no information about a new flight schedule, or even the present status of the spacecraft.

The result? Even though Blue Origin was flying commercial suborbital flights regularly about two years earlier that Virgin Galactic, the latter company has now completed more flights. This slow pace is not how a commercial company driven to earn profits and compete successfully operates. In the end it drives away customers, while ceding market share to competitors.

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Virgin Galactic completes first manned suborbital flight in two years

8:59 am

Virgin Galactic yesterday completed its first manned suborbital flight since July 2021, carrying six employees to about fifty miles altitude for about five minutes.

Virgin Galactic’s “mothership” aircraft, VMS Eve, took off from the runway at Spaceport America in New Mexico at 11:15 a.m. Eastern. The takeoff occurred more than an hour behind a schedule provided by the company the day before, but the company did not disclose the reason for the delay.

Virgin Galactic released VSS Unity at 12:23 p.m. Eastern. The spaceplane appeared to perform a nominal burn of its hybrid rocket engine before descending to a runway landing back at Spaceport America nearly 15 minutes later. Virgin Galactic said the vehicle reached a peak altitude of 87.2 kilometers — above the 50-mile altitude used by U.S. government agencies for awarding astronaut wings, but below the 100-kilometer Kármán line — and top speed of Mach 2.94.

The company did not live stream the event, in sharp contrast to the heavy coverage it always provided when Richard Branson was in charge. It now says it soon begin regularly passenger flights.

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Despite a complete lack of any customers, Spaceport America in New Mexico now plans to build a “reception center.”

9:28 am

The New Mexico Spaceport Authority has decided it needs to build another building at Spaceport America, even though that spaceport has seen no significant business in its almost two decades of operation, and has little indication of any future business to come.

The Spaceport Technology and Reception Center’s mission “will be to become the welcoming face to staff, visitors, and prospective customers visiting or working at Spaceport America. The proposed 30,000 square foot STARC building will be a multi-use facility; it will house the Spaceport’s core IT server center, staff offices and conference rooms, an Auditorium, food preparation and dining area, virtual experience center, and 2nd and 3rd floor lounge and viewing areas,” according to a request for proposals (RFP) issued by the New Mexico Spaceport Authority (NMSA). “The new building will provide modern, comfortable work and meeting spaces for NMSA staff and a means to receive, entertain and educate groups of visitors and/or potential customers,” the document added.

The article goes on to detail how NMSA has spent millions of tax dollars for years, with the promise of billions of revenue from space launches and thousands of local jobs, all of which have turned out to be pie in the sky. Other than Virgin Galactic, which remains a very questionable customer, no major rocket companies have shown any interest in launching from this spaceport.

To propose spending more on another building that will likely sit empty most of the time is absurd. As the article notes, New Mexico has many much more compelling issues to spend its taxpayer money. This boondoggle should be shut down.

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Virgin Galactic’s WhiteKnightTwo mother ship unveiled after major overhaul

9:15 am

Virgin Galactic yesterday rolled its WhiteKnightTwo mother ship from its hanger after a 15-month overhaul in preparation for taxi and flight tests.

After some initial taxi and flight tests in Mojave in California, the plane will fly to New Mexico for further flight tests with Unity attached. Company officials hope to complete these test flights by the end of March, and then begin commercial flights shortly thereafter.

In comparing the pictures released yesterday at the link above with this 2009 picture, it appears the company completely replaced the central bar that connects the plane’s two passenger sections. In the older picture, that bar was not straight, but was built like a very shallow upside-down “V”, with the center point where a SpaceShipTwo spacecraft was attached.

The new bar is straight, and appears more robust.

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Bad news for Branson

9:43 am

Two stories today suggest that Richard Branson’s space empire continues to totter.

First, a judge ruled that the fraud lawsuit against Branson by other stockholders in the suborbital tourist company Virgin Galactic can go forward.

The suit claims Branson concealed safety problems while he sold off the bulk of his own stock at top dollar. Only after he had dumped his stock were those problems revealed, and the stock price plummeted, now trading at less than 10% of the peak in February 2021, when Branson sold.

Second, it appears that though Branson’s satellite orbital company Virgin Orbit is operational, it is not going to launch as many satellites this year as expected, and thus required an investment of $25 million on November 4th from Branson’s Virgin Group to stay liquid.

Branson clearly wanted to be a major player in space. In the end, he has mostly failed, though once again Virgin Orbit remains a viable launching company for smallsats.

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Virgin Galactic losses 3x higher than last year

9:30 am

Even as Virgin Galactic has announced a contract with Axiom to fly a zero gravity suborbital training flight for one of its astronauts, the company also posted its 2021 third quarter statement, revealing losses three times higher than the previous year.

The company posted a net loss of $146 million for the three months ended Sept. 30, compared with a $48 million net loss in the same period last year. The widened loss was in part driven by increased research and development cost, which came at $97 million in the June-September quarter, three times higher than last year.

The company posted a net loss of $146 million for the three months ended Sept. 30, compared with a $48 million net loss in the same period last year. The widened loss was in part driven by increased research and development cost, which came at $97 million in the June-September quarter, three times higher than last year.

Quarterly revenue was only $767,000, down 70 percent from a year ago. Virgin Galactic hasn’t started commercial service of its suborbital spaceflight. The company currently makes money by taking deposits for future flights and providing engineering services to other companies.

Company officials still say that it will begin flying customers in the second quarter of ’23, as promised, though it also appears that the demand for its business has plummeted. At the same time, it reports it has $1.1 billion in its coffers for future development.

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A look back at Virgin Galactic’s failed history

10:25 am

Link here. Doug Messier has probably provided the best news coverage of every up and down (mostly down) of Virgin Galactic since its beginning. As he notes at the beginning of his article:

A lot can happen in 18 years.

A mother can go from holding her newborn baby in her arms to sending her child off the college for the first time. In between, the child has learned to walk and talk, endured the rigors of puberty, and spent at least 13 years in school.

During that same time, Virgin Galactic essentially accomplished nothing, while wasting billions in private investment capital. Meanwhile, Richard Branson pumped and dumped, getting out when the getting was good and leaving others to hold the bag.

Definitely worth the read. The story of Virgin Galactic demonstrates the risks inherent in capitalism and freedom. Freedom allows for big dreams, but before you commit to any dream you better look it over very carefully or you might be burned.

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Virgin Galactic once again delays commercial suborbital operations

9:08 am

Capitalism in space: In releasing its quarterly report, Virgin Galactic yesterday revealed that it is once again delaying the start of commercial suborbital operations, pushing back from the first quarter of 2023 to the second quarter.

In an earnings call, company executives said that the latest delay was not directly related to supply chain and staffing problems it blamed for the previous delay. Instead, refurbishment work on its WhiteKnightTwo plane, VMS Eve, was taking longer than planned. “The driver is around the amount of time it is taking us to accomplish the work scope on Eve,” said Michael Colglazier, chief executive of Virgin Galactic. “We did not plan the full amount of time that’s been needed to get this work accomplished.”

Company officials also said they are shifting its customer emphasis, now focusing much more on “private and government researchers.” Let me translate: The public is not buying tickets, so Virgin Galactic hopes to convince the government to keep it afloat instead.

I predict this company will likely never fly any customers, and it appears the stock agrees, with the stock plunging in value, from $8.25 to $6.95 in less than a day.

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Virgin Galactic leases facility in Arizona to build up to six of its reusable suborbital space planes

9:13 am

Capitalism in space: Virgin Galactic announced on July 14, 2022 that it has leased a new facility in Mesa, Arizona where it will build up to six of its reusable suborbital space planes, with the goal of beginning commercial flights by late 2025.

The Delta class spaceship is Virgin Galactic’s production vehicle that is designed to fly weekly, supporting the Company’s target of 400 flights per year from Spaceport America. Based on current schedules, the first of these ships is expected to commence revenue-generating payload flights in late 2025, progressing to private astronaut flights in 2026.

The Company is currently selecting various suppliers to build the spaceship’s major subassemblies, which will be delivered to the new Mesa facility for final assembly. Virgin Galactic motherships will ferry completed spaceships to Spaceport America, New Mexico for flight test and commercial operation.

Combined with its recent contract award to Aurora to build two new motherships, it appears the management that replaced Richard Branson at Virgin Galactic has found that it can’t really proceed with commercial operations with the ships Branson left behind. Apparently the company is working to replace everything, and will likely delay commercial operations another few years in the process.

These decisions might be smart, but considering the company’s long history of endless delays, the buying public and the investment community might not be willing to tolerate more delays. It also remains very questionable there is enough business to justify its prediction of 400 flights per year, even if the company loses no customers.

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Virgin Galactic is replacing its WhiteKnightTwo mother ship

9:21 am

Virgin Galactic yesterday announced that it has hired Aurora, a Boeing subsidiary, to build two new mother ships to to replace WhiteKnightTwo and launch its SpaceShipTwo suborbital space planes.

Virgin Galactic Chief Executive Officer Michael Colglazier said: “Our next generation motherships are integral to scaling our operations. They will be faster to produce, easier to maintain and will allow us to fly substantially more missions each year. Supported by the scale and strength of Boeing, Aurora is the ideal manufacturing partner for us as we build our fleet to support 400 flights per year at Spaceport America.” [emphasis mine]

The press release claims the first new mother ship will begin operations in 2025.

Forgive me if I am very very skeptical. The highlighted words tell us a lot about this company. First, we now have confirmation that the company has had problems maintaining WhiteKnightTwo. This fact was strongly implied when all planned flights in ’21 and ’22 were cancelled following that first passenger flight in July ’21 in order to do a full maintenance refit of WhiteKnightTwo. This press release tells us that the company’s management has recognized that WhiteKnightTwo cannot be maintained much longer.

Second, the company continues to overhype its future, even without Richard Branson. The chances of it flying 400 times per year, anytime in the near future, is so slim as to be non-existent.

Third, the need to hire an outside company to build these new mother ships also suggests that Virgin Galactic no longer has the capability of doing it itself.

Right now the company’s stock is selling for about $7 per share, well below its initial price of about $12. Expect it to fall again.

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Virgin Galactic delays commercial suborbital flights again

9:42 am

See update below.

Capitalism in space: In releasing its quarterly report, Virgin Galactic revealed that it is once again delaying the beginning of commercial suborbital flights, pushing back those first flights until the first quarter of 2023.

The net loss for Q1 2022 was $93 million, which was higher than Q4 2021 net loss of $81 million but less than the $130 million loss for the first quarter of 2021.

Flight tests of Virgin Galactic’s VSS Unity suborbital space plane that were supposed to take place this summer have been pushed back to the fourth quarter. And the start of commercial service has been delayed from the fourth quarter to 2023. The company said the delays were due to supply chain and labor constraints.

You can read the full quarterly report here.

The company also says it still has 800 reservations for those commercial flights, which suggests that once flights begin it will have plenty of business for at least a period of time, depending on how frequently it can launch and how many passengers can fly each time.

UPDATE: The overhype of all of Richard Branson’s hi-tech projects, such as Virgin Galactic, was further illustrated by this other story from February about Branson’s well publicized project to build a hyper-loop transportation system in West Virgina.

Hyperloop was over-hyped. As the Financial Times first reported, Virgin Hyperloop laid off about half of its staff, as it makes a major shift it its goals. “The U.S. company said 111 people were laid off on Friday as it refocuses on delivering a cargo version of the experimental transportation system.”

Hat tip John Harman.

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Former CEO of Virgin Galactic sued over his pump-and-dump stock sale

9:44 am

Buyer beware: Chamath Palihapitiya, who recently stepped down as CEO of Virgin Galactic, has been sued by some of the company’s stockholders for using his insider position to pump-and-dump his stock while keeping vital information secret illegally.

The complaint, filed on behalf of Virgin Galactic to seek damages from its directors and officers, also alleges that founder Richard Branson pocketed $301 million by dumping his shares while the stock price was “artificially inflated.”

Leaders of the company were well aware of defects in its spacecraft three years before they were publicly disclosed last year, according to the complaint filed in federal court in Brooklyn, New York.

It is unclear from the article whether Branson is being sued as well.

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Virgin Galactic chairman resigns

8:54 am

Getting out while the getting is good: Chamath Palihapitiya, who has been chairman of Virgin Galactic’s board since it went public in 2019, suddenly announced today that he has resigned from the company.

Palihapitiya’s SPAC, or special purpose acquisition company, took Virgin Galactic public in October 2019. The company’s stock has faced volatile trading since then — climbing above $60 a share in the months ahead of Sir Richard Branson’s test spaceflight, but it recently fell below its public debut price on news of a further delay in the start of commercial service.

The now-former chairman sold his personal Virgin Galactic stake in early 2021 that was worth over $200 million at the time. But he indirectly owns about 15.8 million shares through Social Capital Hedosophia Holdings.

Like Richard Branson, Palihapitiya sold the majority of his stock when the price was high, about the time the company flew its first and only passenger flight in July, with Richard Branson on board. His exit now suggests he wants out before the company’s dismal future prospects become obvious.

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A rebranded Virgin Galactic to reopen ticket sales

9:14 am

Capitalism in space: Virgin Galactic today announced both a major rebranding of the company — significantly deemphasizing its links to Richard Branson — as well as a resumption of ticket sales for its suborbital flights.

Virgin Galactic opened ticket sales to the general public and rebranded itself today a week ahead of what promises to be another dismal quarterly earnings report. The company most recently reported to having 700 reservations for suborbital spaceflights, with plans to reach 1,000 later this year. Space tourism flights are currently scheduled for the fourth quarter of 2022.

Virgin Galactic’s battered stock, which opened at $8.93, soared by more than 29 percent to $10.50 on the New York Stock Exchange. The company is scheduled to report earnings (actually a loss) for the fourth quarter of 2021 on Feb. 22.

Tickets will cost $450K, with a $150K deposit required. It also appears that — in order to encourage sales — the company is capping present sales to the first 1,000 who provide the deposit. Since it has for years claimed it has 700 paying customers already, this suggests they are looking for only another 300 at this time.

Branson’s share in the company is now only about 11% — having successfully pumped and then dumped 80% of his shares — and it appears its management senses his name and the association with his Virgin Group now carries more negative than positive connotations. The new company logo for example shrinks the word “Virgin” so much that if you didn’t look close, you’d think the company was simply called “Galactic.”

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New Mexico legislature dumps space tourism sales tax proposal

9:05 am

Capitalism in space: A committee in the New Mexico legislature yesterday rejected a space tourism sales tax proposal submitted by two sponsors, one from each party, essentially killing the bill.

The vote to kill the bill was 9-1, with the only yes vote coming from the Democrat representing Albuquerque.

That the tax was voted down so conclusively suggests there actually might be some brain cells among the elected officials in New Mexico. Hard to believe, considering that the tax was actually proposed at a time when New Mexico’s only customer for space launches, Virgin Galactic, is in trouble and might go bankrupt. Raising its taxes would likely have only guaranteed that company’s failure.

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NM legislators propose sales tax on Virgin Galactic tourist flights

9:08 am

We’re here to help you: A bi-partisan proposal by two New Mexico legislators would create a 6% to 9% sales tax on any Virgin Galactic space tourist flights that take off from Spaceport America.

“If the flights really became regular, that could be a nice source of income, not only for the state but also from the GRT shared with the local communities,” [one of] the bill’s … sponsors, Democratic Rep. Matthew McQueen, said.

…”I can’t think of a particularly good reason why we wouldn’t tax this activity,” McQueen said.

McQueen might be too stupid to think of a reason, but I can think of dozens, and they are called the many other airport runways across the globe where Virgin Galactic can launch tourists and bypass this tax. The company already has agreements with several.

The stupidity of this legislative proposal at this time is compounded in that Virgin Galactic, the only customer Spaceport America presently has, is struggling badly. It has yet to fly any commercial flights, and is facing investor lawsuits and an aging fleet. Adding a tax on top of these problems could kill it, thus making this bill a perfect example of killing the goose that laid the golden egg, before the goose is even born. Moreover, it will certainly discourage anyone else from launching from New Mexico, especially as there are so many other spaceport options popping up worldwide with no such sales tax.

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Virgin Galactic wants to borrow $500 million from investors to stay afloat

8:52 am

Capitalism in space: Virgin Galactic announced yesterday that it is offering investors a chance to loan it up to $500 million, an effort apparently to keep the company operating while it refits its WhiteKnightTwo carrier aircraft and its Unity spacecraft.

The company plans private offerings of $425 million in convertible senior notes that will mature in 2027, and an additional $75 million in notes is expected to be granted to the buyers, it said in a statement.

In response, the stock price for the company tumbled, dropping for the second time below the initial $11.75 price offered two years ago when the company went public. Unlike the previous time last week, the price has not quickly recovered, but has continued to fall, dropping to a new low today under $10.

When the company went public in early 2019, it predicted it would be flying commercial tourist flights in 2020. That did not happen, which should have been no surprise to investors considering the company’s failed track record of meeting its promised schedule. At present it says that the first commercial flight will occur near the end of this year. Don’t bet on it. I would not be surprised it bankruptcy occurs first.

Freedom carries great opportunity. It also carries great risk. For those who invested in Virgin Galactic and did not sell right after its one and only suborbital tourist flight in July ’21 (as did the company’s founder Richard Branson), it appears they are about to experience the latter.

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Virgin Galactic stock crashes

9:40 am

Capitalism in space: For the first time since Virgin Galactic became a publicly-traded company two years ago, its stock on January 6th dropped below its initial offering price.

On Thursday, stock of the space tourism company fell to as low as $11.30 before rising back to $11.90 by the afternoon. When the company merged with a special purpose acquisition company to go public in 2019, its debut price was $11.75.

In the two years in-between, the price was pumped up to as high as $62, during which the company’s founder, Richard Branson, sold off about 80% of his stock, reducing his holdings from 51% of the company to only 11% and walking away with about $1.25 billion in cash.

Right now the company’s future is very much in question. It has delayed all of its commercial suborbital flights until late this year, if then. Meanwhile, Blue Origin is flying commercial suborbital tourist flights, and the orbital space tourism market is ramping up quite successfully. With no ability to enter that orbital market, Virgin Galactic appears to be at a dead end.

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More Spaceport America corruption allegations flung about in New Mexico

10:58 am

New allegations of corruption and lawbreaking against Michelle Lujan Grisham, the Democrat Party governor of New Mexico, were revealed in a lawsuit filed this week by the former chief financial officer of Spaceport America, Zach DeGregorio.

Zach DeGregorio, the former Chief Financial Officer of Spaceport America, alleges that one of Grisham’s political appointees, Alicia Keyes, encouraged him to falsify an economic impact study. He also alleges that Keyes mishandled a bond refinancing for the purpose of defrauding the state. When DeGregorio attempted to report the wrongdoing, he claimed, he was threatened with investigations and a firing.

…The lawsuit also alleges that Spaceport America’s chief client, Virgin Galactic, and its CEO, Richard Branson, bribed Lujan Grisham in exchange for “essential business” status during COVID-19 shutdowns. The governor’s office met with Virgin Galactic shortly before Grisham “ma[d]e changes to the NM Spaceport Authority board,” “ma[d]e staffing changes at the NM Spaceport Authority,” and “made operational changes at the NM Spaceport Authority that benefited Virgin Galactic at the expense of other customers and the NM taxpayers,” according to the lawsuit.

You can read the actual filing here [pdf].

DeGregorio resigned in 2020 after filing an earlier complaint alleging that the CEO of Spaceport America, Daniel Hicks, had broken several laws in operating the spaceport. In the new lawsuit DeGregorio also alleges that Hicks tried to illegally access his email account to read private emails concerning these allegations.

Spaceport America was established a previous Democratic Party governor, Bill Richardson, based on Richard Branson’s false promises that Virgin Galactic would soon be flying hundreds of tourist flights yearly, thus attracting other space-related business to New Mexico. Since then all the state has gotten from the spaceport is expenses, almost no business, and a lot of scandal. This story is not the first, and I suspect it will not be the last, especially if Virgin Galactic goes bankrupt in the next few years (something I personally expect).

What Spaceport America will likely not get is actual business. It can’t work for orbital flights, being in the interior, and there isn’t enough orbital runway business to sustain it, especially since there are thousands of other runways to choose from.

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Virgin Orbit merger produces only half the investment capital expected

9:28 am

Capitalism in space: It appears that the merger of Virgin Orbit with the special purpose acquisition company (SPAC) NextGen Acquisition II has produced only half the investment capital that had been expected.

The merger had expected to produce $483 million in investment capital for the rocket company. Instead it has produced only $228 million because many shareholders of NextGen cashed out before the merger occurred. Apparently, these shareholders did not have confidence in the Virgin Orbit, and feared their stock value would drop once the merger was completed.

It appears that Virgin Orbit has been stained by the failure of another Richard Branson space company, Virgin Galactic, to deliver on its promises. Virgin Orbit has successfully completed two orbital flights, and is expected to complete a third shortly. Unlike Virgin Galactic, it has done what it said it would, though it took longer than predicted (delays that were not unreasonable considering it was a startup rocket company). Investors have looked at the collapse of Virgin Galactic stocks, and have decided they do not wish to gamble their money on another Branson space company, no matter how successful.

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Class action securities fraud lawsuit filed against Virgin Galactic

8:50 am

Capitalism in space: In what will likely be the first in a number of similar legal actions, a lawsuit was filed against Virgin Galactic earlier this month accusing the company and a number of upper management individuals of securities fraud.

A class action lawsuit was filed in New York on Dec. 7 alleging securities fraud by Virgin Galactic, which went public on the New York Stock Exchange (NYSE) in October 2019 after merging with Chamath Palihapitiya’s Social Capital Hedosophia (SCH).

Named in the lawsuit are Virgin Galactic Holdings, CEO Michael Colglazier, former CEO George Whitesides, former current chief financial officer Doug Ahrens, and former chief financial officer Jon Compagna.

The lawsuit was filed amid years-long delays in the start of commercial human suborbital flights that have caused a sharp decline in the value of the stock. Virgin Galactic began trading on the New York Stock Exchange at an opening price of $12.34 on Oct. 28, 2019. The stock is now trading at $14.46 having previously soared to a high of $62.80.

The article description of the condition of the company’s WhiteKnightTwo carrier plane and its suborbital craft VSS Unity suggests that the likelihood of further tourist flight could be low.

It is also interesting that Richard Branson is not named, as he clearly played a part in any such action. He also conveniently sold most of his stock in the company when its price was on the high end of its roller coaster. It could be the plaintiffs left him out in order to keep his substantial financial big guns from firing back at them.

More lawsuits are expected however, and we should not be surprised if both Branson and Palihapitiya get included at some point.

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Branson sells another $300 million in Virgin Galactic stock

9:00 am

Capitalism in space: Richard Branson has sold another $300 million of his Virgin Galactic stock, reducing his share in the company to only 11.9%.

When Virgin Galactic went public, Branson sold off 49%, so that he was still the majority owner with 51% holdings. Since then, he has made more a billion dollars reducing his holdings to a point where today he is a very minor player in the company. Meanwhile, after that one suborbital passenger flight in July, that included Branson, the company has delayed further commercial suborbital flights until late next year while it overhauls WhiteKnightTwo and Unity.

Branson’s entire strategy with this company sure looks like a classic case of a pump-and-dump scheme. He pumps the company up for fifteen years, goes public, and then times his stock sales to maximize the value of the stock. And in the process he gets out before the company begins any commercial operations, when its viability will finally be demonstrated clearly.

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Virgin Galactic delays next Unity suborbital flight until next year

12:18 am

Capitalism in space: Virgin Galactic announced today that it is delaying its next Unity suborbital manned flight until next year so that it can first complete a planned maintenance inspection and overhaul of both Unity and its carrier airplane WhiteKnightTwo.

The company said Oct. 14 that it decided to move directly intended a planned maintenance period after a recent lab test of materials used on the vehicles “flagged a possible reduction in the strength margins of certain materials used to modify specific joints” that “requires further physical inspection.”

…That decision means that the company will delay Unity 23, a mission for the Italian Air Force that had been scheduled for as soon as mid-October, until after the maintenance period is completed next year. That flight had been previously scheduled for late September or early October but postponed to look into a potential manufacturing defect with a component in a flight control actuation system.

The endless delays at Virgin Galactic, stretching out now for almost fifteen years, threaten this company’s competitive standing. With Blue Origin now apparently able to fly commercially and regularly, one wonders why anyone would risk flying on Unity. Of course, people will, once the ship is cleared for commercial flights, but right now the price will likely have to be less than what Blue Origin is charging to garner business.

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FAA clears Virgin Galactic to fly

10:35 am

Capitalism in space: FAA yesterday closed out its investigation into the flight path deviation during the July Virgin Galactic suborbital flight, clearing the company to resume flights.

To prevent future issues, the company will request that a larger zone be restricted on future flights. The FAA also criticized the company for not revealing the flight deviation to the FAA immediately, and demanded the company make sure it doesn’t happen again.

The article at the link also notes that the Virgin Galactic employee whose job it was to provide that information to the FAA resigned the day before this announcement. There is no evidence however that there is any link to the two events, though it is very likely that person was made the fall guy to satisfy the FAA and Virgin Galactic.

Whether flights will resume in mid-October as the company has stated earlier is not clear, as there is no word about whether the manufacturing defect in the flight control equipment revealed by a third-party supplier has been resolved.

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Fired flight director accuses Virgin Galactic of lying about problems on July suborbital flight

9:19 am

A former Virgin Galactic flight director, who was relieved of his duties just before the company’s July suborbital flight that carried Richard Branson and then fired shortly thereafter, has accused Virgin Galactic of misleading the public in its statements about the problems that occurred during that flight.

Virgin Galactic has claimed that the high winds forced the spacecraft away from its planned flight path.

Mark Stucky, who Virgin Galactic fired eight days after Branson’s flight, said his former employer put out an inaccurate statement about why VSS Unity flew unauthorized into Class A airspace for 1 minute 41 seconds during its descent. Class A airspace is primarily used by airlines, cargo operators and higher performance aircraft.

“The most misleading statement today was @virgingalactic’s,” Stucky tweeted. “The facts are the pilots failed to trim to achieve the proper pitch rate, the winds were well within limits, they did nothing of substance to address the trajectory error, & entered Class A airspace without authorization.”

There is no way to know if Stucky’s accusation is correct. We might be seeing a bit of personal anger on his part considering his firing. At the same time, the FAA’s statement about this issue made no mention of winds, which suggests the Virgin Galactic statement might not be true.

Regardless, Virgin Galactic’s track record in matters of safety has not been stellar. The company needs to quickly resolve these issues or they will become a lingering sore that will damage sales for future suborbital flights.

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