2024-04-02 11:42:00 ET
Summary
- The recent Boeing lawsuit against Virgin Galactic could delay its timeline to starting commercial Delta class spaceflights in 2026.
- Virgin Galactic is unlikely to reach its target cadence of 2 Delta class spaceflights per spaceship per week in 2026 due to its existing mothership’s limitations stemming from its age.
- Virgin Galactic’s decision to pause Unity flights in Q2 2024 means that the company may not generate any revenue until commercial flights of Delta class spaceships commence.
- Virgin Galactic’s cash runway is only enough to last less than 2 years and the lawsuit could accelerate its need to raise capital, in my opinion.
- Bankruptcy is a strong possibility for Virgin Galactic, in my view, if it's unable to start commercial Delta class spaceflights in 2026 with $418.7 million of debt maturing in 2027.
With its stock already down 40% YTD, Virgin Galactic Holdings, Inc. ( SPCE ) was recently dealt a huge blow after The Boeing Company ( BA ) filed a trade secret and breach of contract lawsuit against it in light of a previous agreement between both parties. A Virgin Galactic spokesperson has since told SpaceNews that the lawsuit is baseless in both facts and law and shared that the company intends to defend itself vigorously. In my opinion, this signals that both companies could be headed to a fierce battle in the courtroom that could take several months to resolve....
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Virgin Galactic: More Downside Expected After Boeing Lawsuit