Virgin Orbit stock is up more than 73% pre-market while yesterday it closed down almost 15%.
Aerospace engineering company Virgin Orbit (NASDAQ: VORB) is set to strike a deal with venture capitalist Matthew Brown. Reuters reported the news referring to a term sheet that revealed that the company is about to reach an agreement with the investor via a private placement of shares. Meanwhile, Virgin Orbit is heading for bankruptcy if it doesn’t secure capital as soon as possible. The space tech company has been in a financial mess, being the toughest fund issue since its inception.
Rumors swirled that the company that provides small satellite launch services was in talks with two companies for funding. The said restructuring companies are Alvarez & Marsal (A&M) and Ducera. However, the latest news on potential financial backing from Mathhre Brown could help Virgin Orbit survive these trying times. Virgin Orbit posted a loss of nearly $44 million in the third quarter. During the three-month period, its cash reserves were reduced from $122 million to $71 million. The company saw its market valuation plunge to an all-time high of $15 million about 24 hours ago. Meanwhile, it boasted a market capitalization of over $4 billion when it went public via a SPAC deal in 2021. Strong competition in the space startup market has also contributed to the company’s recent losses. business.
Virgin Orbit nears deal to receive $200 million from Matthew Brown
According to the term sheet, Virgin Orbit and Matthew Brown are looking to complete the deal on Friday. During the initial agreement, a final agreement would always be necessary. A person with direct knowledge of the ongoing discussion with Matthew Brown said Virgin Orbit executives agreed to the deal in a meeting on Tuesday, the same day the company recorded its lowest market cap since its public debut.
Pursuant to the agreement with Virgin Orbit, Matthew Brown will have access to the conversion of his preferred stock investment into common stock. The conversion will be based on the volume weighted average price in the 30 days prior to the conclusion and signing of the agreement. The converted shares will also have the same voting rights as the ordinary shares.
Prior to striking a deal with Mathew Brown, Virgin Orbit was exploring strategic options to stay afloat in flowing water. The satellite launch company recently announced a staff furlough, affecting almost all of its employees. The news caused its shares to fall more than 43%. The same shares jumped over X2 as Reuters reported news of incoming funding. At press time, Virgin Orbit Holdings is trading down 73.26% at $0.77, after closing nearly 15% lower. Market data shows no signs of gains for the past year. Instead, the company has lost 93.91% over the past twelve months.
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Ibukun is a crypto/finance writer interested in conveying relevant information, using non-complex words to reach all kinds of audiences. Besides writing, she enjoys watching movies, cooking and exploring restaurants in the city of Lagos, where she resides.
