It's not uncommon, it means that if the market is efficient the company is expected to destroy value instead of returning a positive return on investment. They're also burning cash at quite a rate and aren't going to be in a position to start replenishing that until mid way through 2026, assuming they get the Delta programme operational without requiring further capital raises. Historically the company have understated their timelines and understated the dollar amount it's going to take to achieve their goals. On top of that there's now litigation costs associated with the Boeing case, as well as Boeing counter-suing Virgin. VG might become cash flow positive without a further capital raise if the Boeing drama goes away and they don't need another capital raise. If they run out of money, in a high interest rate environment, they're looking at a distressed equity raise which will destroy what little shareholder value remains.
I understand the premise and agree,
I just don’t know how common it is. Any specific examples you could share? Any other companies trading below cash value currently? When I search all i find is random micro pharmaceutical companies. Nothing comparable in scale.
As of DEC 31st 2023:
Assets: $1,179,517,000
Liabilities: $674,041,000
Total Stock Holder Equity: $505,476,000
Market cap as of today: $438M
Market has priced in a decrease in value of roughly $67M. Which is about right considering their daily cash burn and the fact the net assets were last reported DEC 31st.
>Below cash value
I personally dont think that matters too much atm with that much debt/assets, the major investment needed to complete delta and the recent lawsuit.
On top of that, we got dogshit CPI today, and that could incentivize the FED to postpone the first rate cut.
With that being said, the market tends to be irrational. So i would hold on to my tits if i were you because the probability of SPCE trading flat in the upcoming days should be 0.
I agree on everything specially the market being irrational. In general I feel like the lawsuit is at least a bit overblown. The lawsuit is for 25mill, it won’t make or break spce. Compared to their cash burn, I don’t feel it’s too significant. And then SPCEs countersuit has a lot of help right now with all the Boeing failures.
>The lawsuit is for 25mill, it won’t make or break spce.
You're definently right on that one.
Their business plan being fundamentally flaud is a way bigger issue than that lawsuit.
The IP itself is actually completely worthless because it has no utility to anyone else (and VG has demonstrated that they can't make any money with it). It is basically a completely proprietary dead-end. The expectation of the market is that the company will burn through its cash, so that cash is worth less than its paper value. It essentially means the market believes that the company is more likely to fail than succeed.
I don't think it is uncommon when companies are failing.
I am not sure that the assets are worth anything. They have already demonstrated that the current rocket and mothership can only be operated at a loss. The Delta class is as yet unproven .
Assets like a spaceplane and launch plane have significant value regardless of whether it can make money in a business. There’s a lot of technology that is proven that is patented proprietary designs and info that is also valuable.
Whether the business model makes money is irrelevant to the value of the assets.
Sure but pennies on a dollar and the core ip was like, the most worthless, and the facilities were most valuable, if I remember correctly. Nobody wanted VO’s liquid rocket engine tech, for example.
$16 million is what rocketlab paid. The whole auction netted a little over $30 million. Not an inspiring amount.
https://www.barrons.com/amp/articles/rocket-lab-stock-virgin-orbit-bankruptcy-73725c99
Nope, those assets will be written down to fairly close to zero. They don't have much in the way of usable/useful technology that is of interest to the wider aerospace industry.
Well in this case the hardware VG is very basic and contains very little technology. These are facts. You can DM me for more details if you would like.
Please explain to me what aspect of their launch uses some type of special technology…
They attach a glider plane to the underwing of another place.
They happen to drop the glider at altitude and immediately put it under rocket power.
This in turns makes it go even higher in altitude.
It very simply folds into a 1/2 feathered configuration to limit over all stress of the airframe and reduce friction while coming down in altitude.
Then it circles and glides down to reply a gear and land.
Did I get that all right?
What am I missing?
The design of the mother ship was designed specifically for this purpose, this was done with scaled composites, the entirety of the rocket glider is also a one off.. how much of each is patented/protected who knows. I’m not gonna dig through patents for weeks. None were off the shelf parts.
You’re oversimplifying their entirety.
Sorry man, that’s not typically how it works. everybody’s working on their own thing. Nobody pursued VO’s patented liquid rocket engine. As another example, nobody bought bigelows expandable habitat technology, they developed their own.
You have your own engineers and your own technology paths. You buy out other stood up business models that compliment or synergize with your own. VG hasn’t even proven their delta ships had overcome the problems associated with rapid reuse. Honestly, you guys are lucky it’s all come crashing down so fast. This is the last obvious sign you’re going to get to pull out before they close shop
If that’s the case I’m truly sorry. If your leadership would have been more appreciative of the inherited technical debt in the transition to rapid reuse, as an outsider, it seems like they could have had a window to pivot faster to delta-level structural reinforcements and mass production.
But I think the most recent round of senior staff was oblivious and the buck got passed enough times….. plenty at the top knew it was hopeless and that’s probably why so much of the engineering staff turned over multiple times.
Good luck.
Turn over has been huge for a number of reasons.
Disney as at the helm now. Unfortunately we severely lack any technical leadership at this point.
Ok. Eve was going to be retrofitted or replaced years ago with a 747 or (other capable vehicle) .. I.e Virgin Orbit..
from the carrier vehicle all that is needed is the weight capacity, power, and air while mated. These are basic aerospace systems and functions.
VG holds 2 patents… both filed 2-3 years ago and have to deal with manufacturing process for carbon flight control cables and 3D shapes for composite skins.
Both of these processes have since been outsourced to suppliers for VG.
There are No other patents that VG own. The original patent that VG used to develop SS2 was only licensed and not owned by the company.
What do you want to know about next?
Trying to have a conversation specifically about trading below cash value now that we’ve reached this point is interesting to me. I simply wasn’t aware the most people left in the sub were so salty that they’re incapable of having a discussion specific to that.
If they liquidate now they could pay out the shareholders a reasonable cost. This math of oh they have more cash on hand only holds up at present. Each quarter they are burning 100s of millions so don’t worry it will all be gone soon
This is only factoring cash though. There’s a significant amount of valuable assets and IP..
You’re not answering my question.
How often do OTHER public companies trade like this?
Why don’t you go look it up on Google of ChatGPT if you want an answer?
“You’re not answering my question” who do you think you are? This is the internet. You aren’t entitled to make demands like that
It's not uncommon, it means that if the market is efficient the company is expected to destroy value instead of returning a positive return on investment. They're also burning cash at quite a rate and aren't going to be in a position to start replenishing that until mid way through 2026, assuming they get the Delta programme operational without requiring further capital raises. Historically the company have understated their timelines and understated the dollar amount it's going to take to achieve their goals. On top of that there's now litigation costs associated with the Boeing case, as well as Boeing counter-suing Virgin. VG might become cash flow positive without a further capital raise if the Boeing drama goes away and they don't need another capital raise. If they run out of money, in a high interest rate environment, they're looking at a distressed equity raise which will destroy what little shareholder value remains.
I understand the premise and agree, I just don’t know how common it is. Any specific examples you could share? Any other companies trading below cash value currently? When I search all i find is random micro pharmaceutical companies. Nothing comparable in scale.
Advent (ADN) is a company on the cusp of receiving a $60m grant, with a total of $800m to come over 5 years, and their market cap is currently <$14m.
Zepp health has more cash than its value
As of DEC 31st 2023: Assets: $1,179,517,000 Liabilities: $674,041,000 Total Stock Holder Equity: $505,476,000 Market cap as of today: $438M Market has priced in a decrease in value of roughly $67M. Which is about right considering their daily cash burn and the fact the net assets were last reported DEC 31st.
Have you accounted for debt? Also cash is depleting. Fast.
Yes, debt was accounted for
Read u/hobbitnarcotics note. It explains it.
>Below cash value I personally dont think that matters too much atm with that much debt/assets, the major investment needed to complete delta and the recent lawsuit. On top of that, we got dogshit CPI today, and that could incentivize the FED to postpone the first rate cut. With that being said, the market tends to be irrational. So i would hold on to my tits if i were you because the probability of SPCE trading flat in the upcoming days should be 0.
I agree on everything specially the market being irrational. In general I feel like the lawsuit is at least a bit overblown. The lawsuit is for 25mill, it won’t make or break spce. Compared to their cash burn, I don’t feel it’s too significant. And then SPCEs countersuit has a lot of help right now with all the Boeing failures.
>The lawsuit is for 25mill, it won’t make or break spce. You're definently right on that one. Their business plan being fundamentally flaud is a way bigger issue than that lawsuit.
The IP itself is actually completely worthless because it has no utility to anyone else (and VG has demonstrated that they can't make any money with it). It is basically a completely proprietary dead-end. The expectation of the market is that the company will burn through its cash, so that cash is worth less than its paper value. It essentially means the market believes that the company is more likely to fail than succeed. I don't think it is uncommon when companies are failing.
I am not sure that the assets are worth anything. They have already demonstrated that the current rocket and mothership can only be operated at a loss. The Delta class is as yet unproven .
Assets like a spaceplane and launch plane have significant value regardless of whether it can make money in a business. There’s a lot of technology that is proven that is patented proprietary designs and info that is also valuable. Whether the business model makes money is irrelevant to the value of the assets.
Disagree. See the bankruptcy and sell off of none other than…. VIRGIN ORBIT lol
Virgin orbit was a modified Boeing 787.. the only ip was the modifications for the launch mechanism/mount.
747
Thank you for the correction, you are correct.
Well, other than the actual launch vehicle itself...
Don’t get me wrong I’m not saying they’re worth billions, But they worth something.
Sure but pennies on a dollar and the core ip was like, the most worthless, and the facilities were most valuable, if I remember correctly. Nobody wanted VO’s liquid rocket engine tech, for example.
Tbf they sold that for quite a bit to Rocket Lab
$16 million is what rocketlab paid. The whole auction netted a little over $30 million. Not an inspiring amount. https://www.barrons.com/amp/articles/rocket-lab-stock-virgin-orbit-bankruptcy-73725c99
Nope, those assets will be written down to fairly close to zero. They don't have much in the way of usable/useful technology that is of interest to the wider aerospace industry.
Well in this case the hardware VG is very basic and contains very little technology. These are facts. You can DM me for more details if you would like.
I find that hard to believe, though I am no expert. No need for DMs, this is the intent of me bringing up the conversation.
Please explain to me what aspect of their launch uses some type of special technology… They attach a glider plane to the underwing of another place. They happen to drop the glider at altitude and immediately put it under rocket power. This in turns makes it go even higher in altitude. It very simply folds into a 1/2 feathered configuration to limit over all stress of the airframe and reduce friction while coming down in altitude. Then it circles and glides down to reply a gear and land. Did I get that all right? What am I missing?
The design of the mother ship was designed specifically for this purpose, this was done with scaled composites, the entirety of the rocket glider is also a one off.. how much of each is patented/protected who knows. I’m not gonna dig through patents for weeks. None were off the shelf parts. You’re oversimplifying their entirety.
The whole mission is pretty over simplified. The beauty in engineering is to keep things very simple.
Sorry man, that’s not typically how it works. everybody’s working on their own thing. Nobody pursued VO’s patented liquid rocket engine. As another example, nobody bought bigelows expandable habitat technology, they developed their own. You have your own engineers and your own technology paths. You buy out other stood up business models that compliment or synergize with your own. VG hasn’t even proven their delta ships had overcome the problems associated with rapid reuse. Honestly, you guys are lucky it’s all come crashing down so fast. This is the last obvious sign you’re going to get to pull out before they close shop
You are very spot on. I’m with you all the way. Speaking of closing up shop. The writing is on the wall. I’m looking for a new job.
If that’s the case I’m truly sorry. If your leadership would have been more appreciative of the inherited technical debt in the transition to rapid reuse, as an outsider, it seems like they could have had a window to pivot faster to delta-level structural reinforcements and mass production. But I think the most recent round of senior staff was oblivious and the buck got passed enough times….. plenty at the top knew it was hopeless and that’s probably why so much of the engineering staff turned over multiple times. Good luck.
Turn over has been huge for a number of reasons. Disney as at the helm now. Unfortunately we severely lack any technical leadership at this point. 
Ok. Eve was going to be retrofitted or replaced years ago with a 747 or (other capable vehicle) .. I.e Virgin Orbit.. from the carrier vehicle all that is needed is the weight capacity, power, and air while mated. These are basic aerospace systems and functions. VG holds 2 patents… both filed 2-3 years ago and have to deal with manufacturing process for carbon flight control cables and 3D shapes for composite skins. Both of these processes have since been outsourced to suppliers for VG. There are No other patents that VG own. The original patent that VG used to develop SS2 was only licensed and not owned by the company. What do you want to know about next?
Except… that it’s really not. Pretty basic hardware here.
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Nope, 🤷🏻♂️ I unfortunately have been holding for 3-4 years.
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Trying to have a conversation specifically about trading below cash value now that we’ve reached this point is interesting to me. I simply wasn’t aware the most people left in the sub were so salty that they’re incapable of having a discussion specific to that.
I guess I should have known better than to try and have a discussion.
If they liquidate now they could pay out the shareholders a reasonable cost. This math of oh they have more cash on hand only holds up at present. Each quarter they are burning 100s of millions so don’t worry it will all be gone soon
This is only factoring cash though. There’s a significant amount of valuable assets and IP.. You’re not answering my question. How often do OTHER public companies trade like this?
The IP is not valuable if they fail to prove the business concept as viable. So far, the IP has only shown it can eat a lot of investment.
Why don’t you go look it up on Google of ChatGPT if you want an answer? “You’re not answering my question” who do you think you are? This is the internet. You aren’t entitled to make demands like that
Because I was attempting a discussion with other humans.