by Douglas Messier
Virgin Orbit’s debut on the NASDAQ stock exchange wasn’t exactly stellar.
The stock opened at $9.18 when trading began on Thursday, Dec. 30. It reached a low of $8.04 when trading ended the following day befrore rising to $8.30 in after-hours trading.
Richard Branson’s launch company went public after merging with NextGen Acquisition Corp. II, a special purpose acquisition company (SPAC) that was already traded on NASDAQ. The merger allowed Virgin Orbit to go public on the exchange under its own name.
NextGen stock was trading at $9.68 when the merger deal was announced on Aug. 23.
A SPAC is a “blank check company” that is essentially an investment vehicle that is traded on the stock exchange. SPACs typically have two years to find a private company with which to merge and take public. If they don’t, then investors can received their money back. Investors also have the option to sell their shares back to the company if they don’t like the deal, which is what happened with the NextGen-Virgin Orbit merger.
As a result, Virgin Orbit will received only $228 million of the $483 million in growth capital it had expected when the deal was announced in August. The Virgin Group and other investors had to put more money into the merger to meet the $100 million cash requirement for the deal.