Analysts at Canaccord Genuity (TSX:CF, LSE:CF) are reviewing their coverage of Virgin Orbit Holdings Inc (NASDAQ:VORB) following the company’s announcement that it would be pausing its operations for a week and furloughing staff without pay.
The California-based satellite launch company said on Thursday that it was exploring strategic options and was in talks for funding, with the news of its "operations pause" coming just two months after its failed rocket launch in the UK.
As one of a handful of Wall Street brokers covering the stock, Canaccord said in a note to clients that it was placing its rating and price target “under review until investors get resolution on the company’s financing,” per a CNBC report.
Analysts at Water Tower Research highlighted Virgin Orbit’s mention of discussions with potential funding sources and its exploring of strategic opportunities as more important than its pause in operations.
“Operation Pause seems to be more of a message to the markets and potential strategic partners than a money-saving device,” the analysts wrote. “One week will save some money, but the message is likely the key.”
The analysts added that, while the launch problems in Cornwall, UK, did not help, it was possible that the overall market for satellite launches and funding is more of a factor.
“We expect to hear more from the company in the coming weeks as it progresses with these efforts,” they concluded.
Virgin Orbit’s Nasdaq-listed shares had fallen more than 30% to US$0.70 on Thursday afternoon.
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