Virgin Orbit stock is up more than 73% in the pre-market while it closed down nearly 15% yesterday.
Aircraft engineering company Virgin Orbit (NASDAQ:VORB) is nearing a deal with venture capital investor Matthew Brown. Reuters reported referring to a term sheet turns out That the company is close to an agreement with an investor through a private share placement. Meanwhile, Virgin Orbit is inching towards filing for bankruptcy if it does not secure capital as soon as possible. The space technology company has been in financial disarray, facing its most challenging funding case since its inception.
The buzz was that the company providing launch services for small satellites was in talks with two firms for funding. The said restructuring firms are Alvarez & Marsal (A&M) and Ducera. However, the latest news on possible financial backing from Mathre Brown could help Virgin Orbit survive these challenging times. Virgin Orbit posted a loss of nearly $44 million in Q3. During the three-month period, its cash reserves were reduced from $122 million to $71 million. The company saw its market valuation drop to a record low of $15 million just about 24 hours ago. Meanwhile, it claimed a market capitalization of over $4 billion when it went public through a SPAC Deal in 2021. High competition in the space startup market also contributed to the company’s recent losses.
Virgin Orbit Nears Deal To Receive $200M From Matthew Brown
According to the term sheet, Virgin Orbit and Matthew Brown are looking to close the deal on Friday. On a preliminary deal, a final agreement would still be needed. A person with direct knowledge of ongoing discussions with Matthew Brown said Virgin Orbit executives agreed to the deal during a meeting on Tuesday, the same day the company recorded its lowest market cap since its public debut.
In accordance with the agreement with Virgin Orbit, Matthew Brown will have access to convert his investment in preferred shares into common shares. The conversion will be based on the volume-weighted average price within the 30 days prior to the closing and signing of the deal. The converted shares will also have the same voting rights as common stock.
Before entering into an agreement with Matthew Brown, Virgin Orbit was exploring strategic options to remain afloat. recent satellite launch company announced An employee holiday affects almost all employees. The news caused its shares to drop by more than 43%. The same shares jumped more than X2 when Reuters reported the incoming funding. At press time, Virgin Orbit Holdings traded up 73.26% to $0.77 after closing down nearly 15%. Market data shows no sign of profit for the past year. Instead, the company has lost 93.91% over the past twelve months.
Ibukun is a crypto/finance writer interested in delivering relevant information using non-complicated words to reach all types of audiences. Apart from writing, she enjoys watching movies, cooking and exploring restaurants in the city of Lagos where she lives.
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