“There’s a rocket in Times Square; but there happens to be [another] one on an airplane right now … we’re doing stuff and I think, at the end of the day, that’s what matters,” Virgin Orbit CEO Dan Hart told CNBC. He rang the Nasdaq opening bell on Friday.
Virgin Orbit stock jumped as much as 26% in trading from its previous close of $6.49 a share.
A spin-off of Branson’s space tourism company Virgin Galactic, the company was privately held by conglomerate Virgin Group, with a minority stake from Abu Dhabi sovereign wealth fund Mubadala — which together have invested about $1 billion in Virgin Orbit to date. It merged with SPAC (or special purpose acquisition company) NextGen Acquisition Corp. II to go public.
The company raised less than anticipated through the SPAC process. While Virgin Orbit previously anticipated the merger would generate about $380 million in SPAC proceeds, the company raised just $68 million — expected to be the result of a high rate of shareholders exercising redemptions.
Virgin Orbit raised further funds through its private investment in public equity (PIPE) round. The company brought in $160 million through the PIPE — instead of just $100 million — from investors including Boeing, AE Industrial Partners, Virgin Group, and Mubadala. That brought Virgin Orbit’s total gross proceeds to $228 million.
The company uses a modified Boeing 747 aircraft to launch its rockets, a method known as air launch. Rather than launch rockets from the ground, the company’s aircraft carries its LauncherOne rockets to about 45,000 feet of altitude and drops them just before they fire the engine and accelerate into space – a method the company touts as more flexible than a ground-based system.
“I respect anybody who ever launches a satellite in space. It’s not an easy thing to do. But … frankly, almost all the companies out there working on it are recreating things that were done in the 1960s,” Hart said. “We’re a launcher that can launch from any place in the world, from any airport — different economics, different reach into customers.”
Notably, air-based launch is not a new approach to delivering satellites to orbit, as the Pegasus system was developed in the 1990s. Hart called Pegasus “a great idea” that was done at the wrong time, when small satellites lacked capability and meant the rocket was “a curiosity more than a business.” He also emphasized that Pegasus utilized excess intercontinental ballistic missiles (ICBMs), which are “not cheap” and “never will be.”
“A liquid [fuel] rocket is much less expensive to make, especially with current manufacturing techniques,” Hart said.
While the SPAC process netted Virgin Orbit about $250 million less in gross proceeds than expected, Hart said the company’s focus is now on executing launches. Virgin Orbit aims to launch seven rockets this year, including one as early as next Wednesday. Hart said the company then plans to further build on that momentum into the years ahead.
“We want to get above the 18 launches a year number and then we’ll see how the market is doing,” Hart said.