Virgin Orbit catches SPAC fever
The small launch company Virgin Orbit announced this week that it's planning to go public via a special purpose acquisition company (SPAC).
The big picture: The news comes after a number of space companies have recently done the same, including Virgin Galactic, Virgin Orbit's sister company focused on human spaceflight.
What's happening: Under the terms of the SPAC, Virgin Orbit is valued at about $3.2 billion, with the deal expected to close by the end of the year.
- Once the deal is closed, the company will be traded on the Nasdaq under the symbol VORB.
- "The Virgin Orbit team has proven its ability to create new ideas, new approaches, and new capabilities," Virgin Orbit founder Richard Branson said in a statement.
How it works: Virgin Orbit uses a modified 747 plane with a small rocket affixed under its wing to launch payloads for government and private customers.
- The plane reaches an altitude of about 35,000 feet above sea level before the rocket carrying the payload releases from the plane and kicks its engine on, bringing its satellites to orbit.
- In January, Virgin Orbit launched its first successful test to orbit, and a commercial mission followed in June.
Between the lines: Going public via SPAC can be an attractive option because it's a way for space companies to diversify sources of revenue away from government funding.
- Rocket Lab, another small launch company, is also going public via SPAC this year to help fund other ambitions like making larger rockets that could compete with SpaceX.
- Yes, but: Going public can also leave these companies — many of which are relatively new and just starting commercial operations — open to the whims of the market, potentially creating more volatility.
Go deeper with Axios' short course on SPACs and Going Public.