New Mexico's 20 year waiting game with Virgin Galactic and Spaceport America may be about to end in a crash landing.

The stock of billionaire Richard Branson's company dived below a dollar a share Monday, an all-time low. If the stock stays under a buck for 30 days it risks being delisted from the NASDAQ which would dramatically impact its ability to raise desperately needed funding.  

Facing this stark scenario, what does VG do? It tries emergency life support to keep the stock above a buck:

Virgin Galactic will ask shareholders to approve a reverse stock split intended to boost the falling share price of the suborbital spaceflight company. . .One proposal will ask shareholders to perform a reverse stock split of between 1-for-2 and 1-for-20. That would convert anywhere from 2 to 20 existing shares of Virgin Galactic stock into one new share. The reverse split would have the effect of increasing the share price. 

A reverse stock split is the opposite of an ordinary stock split. Instead of giving you more shares, it leaves you with fewer. Investors are upset at this prospect -- even though it won't affect the actual value of an investment in Virgin Galactic. Whether you own 1,000 shares of stock worth $1 each or 50 shares of stock worth $20 each, you own $1,000 worth of stock.

Another sign that the death rattle may be near for VG and its space tourism flights from Spaceport America near T or C is Branson's declaration that he is through dumping cash into the struggling venture:

Branson said that his business empire will not be putting more money into Virgin Galactic, which recently fleshed out its near-term growth strategy. “We don’t have the deepest pockets after COVID, and Virgin Galactic has got $1bn, or nearly. It should, I believe, have sufficient funds to do its job on its own,” he said. 

NM Spaceport

But does VG really have "sufficient funds?" At the end of last year it listed $982 million in cash and marketable securities after losing $502 million in the same year and $500 million in '22. Most of the cash is from well-off potential space tourists who have ponied up as much as $400,000 a pop to secure their dream of being launched into suborbital space.

Investors continue to run for the hills, crashing the stock Monday nearly 13 percent leaving it at a meager seventy-five cents a share. 

That price values the company at about $300 million, a whole lot less than VG says it has in cash. 

Investors are clearly saying (and warning) that they believe VG is going to burn through the cash they have before they can restart regular space launches that are in abeyance while the company builds a new spacecraft. 

Before halting flights the company had launched 19 customers.

VG's slogan is turning the "impossible into the inevitable." Sadly the inevitable appears to be a going out of business sign.

Sure, the company's demise has been prematurely forecast before but never has Branson acted like a pallbearer as he is now.

The honchos at Spaceport America seem to see what's coming. They've been leaning on the Legislature for a couple of million a year in subsides to keep the taxpayer-built Spaceport going. In their new ten year plan they say they will seek many more tenants as they try to diversify away from the dependence on VG.

Meantime, the political powers that be here continue to play ostrich, seeing and speaking little on the subject. Soon there will be something to open their eyes as VG comes in for a landing on a wing and a prayer--and maybe only a prayer.  

MORE VG COVERAGE

Reader Dan Warren in Sierrra county has been on the VG watch:

Hi Joe, Factors affecting their continued existence include recently being sued by Boeing for $25 million for money Virgin Galactic failed to pay them. Virgin Galactic responded by counter-suing Boeing, claiming Boeing's work for them was shoddy. 

To make things more difficult in coming months as Virgin Galactic plans for their last flight in New Mexico during the second quarter is a grounding order by the FAA. This happened after their January flight when an alignment pin broke off and fell to the ground somewhere. Most stories about the broken alignment pin never mentioned that the result was being grounded. Virgin Galactic will need to redesign (?) and repair the broken part and get FAA approval before they can fly the last flight of the Unity Spaceship, which is supposed to fly in the next 75 days and they said they would. 

 KUDOS TO HAALAND

Chavez and Haaland

An interesting email from former ABQ Mayor Martin Chavez in reaction to the Monday blog wherein Sec. of Interior Deb Haaland was mentioned as a possible '26 Dem Guv candidate as well as Sen. Martin Heinrich. Is the former three term Mayor taking sides in the early going? You be the judge:

Joe, Kudos to Secretary Haaland and Senator Heinrich for their good work regarding Placitas and gravel mining. Lost somewhere in the news, however, is the truly historic Final Public Lands Rule announced last week by the Department of Interior which elevates clean energy and conservation to at least equal status with fossil fuel extraction on public lands. Assuming it overcomes the legal challenges which are sure to ensue, New Mexico's Deb Haaland will go down as one of the most impactful Secretaries of Interior of all time. We all knew that hers was an historic appointment but this new rule will forever change how public lands are managed. And all by our own Deb Haaland! 

Haaland's base in the state Dem party is progressive but former Mayor Marty is a keeper of the flame for moderate Dems and Hispanics. As we said, interesting.

CLOSING IN

The June 4 primary is closing in. The SOS comes with this:

Registered voters in New Mexico can now request an absentee ballot for the 2024 Primary Election at NMVOTE.ORG. This year, voters can also voluntarily opt-in to be part of the permanent absentee list when requesting their absentee ballot. When a voter chooses this option they will receive an absentee ballot in the mail for every subsequent election. Voters can remove themselves from the permanent absentee list at any time.  The deadline to request an absentee ballot for the Primary Election is Tuesday, May 21, 2024. If mailing back an absentee ballot, voters should allow 7-10 days for their ballot to be delivered back to their County Clerk’s office.

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