Will NM’s Leaders Lose their Billion Dollar Bet?
We can recoup the billion-dollar bet on Virgin Galactic.
In 2005, Bill Richardson and his fellow Santa Fe Democrats bet big on Richard Branson when they authorized the construction of Spaceport America for Virgin Galactic. Their bet cost New Mexico Taxpayers $225,000,000.00, which we were promised would be recouped in lease payment when Virgin Galactic flew 50,000 people into space in the first ten years of operation.
In 2023, Governor Lujan Grisham, Senate Pro Tempore Stewart, and House Speaker Martinez are crossing their fingers that Bill Richardson and their fellow Santa Fe Democrats' big bet on Richard Branson will still pay off despite all the evidence.
2021 was an excellent year for Richard Branson. On February 11, 2021, Virgin Galactic’s stock closing price was an all-time high of 59. 41. On July 11, 2021, Richard Branson, aboard VSS Unity, was the first billionaire to fly into space, beating archrival Jeff Bezos by just nine days. Branson sold 75% of his shares in Virgin Galactic for 1.4 billion dollars.
Before 2021 was out, turbulence appeared in Virgin Galactic's trajectory; VSS Unity's record-breaking flight continued into space despite flashing lights in the cockpit and flew outside its designated airspace. The FAA grounded Virgin Galactic flights until the issues were corrected. However, Virgin Galactic assured the public that the new fleet of carrier aircraft and space planes would arrive and that a bright future lay ahead.
In February 2022, since I saw no indication that Virgin Galactic was building a new fleet, I drove to Virgin Galactic’s operation in Mohave, California. I found an empty parking lot and a relatively quiet manufacturing facility. The one person I spoke with at the facility stated we are building a fleet of aircraft. Their public relations spokesperson had no comment, and their investor relationship person hung up the phone. A month later, Virgin Galactic announced a new manufacturing facility in Mesa, Arizona, to build their new spacecraft fleet, and Boeing’s Aurora would make the two new carrier aircraft.
On February 7, 2022, a US judge ruled in the case Kusnier et al. v. Virgin Galactic Holdings et al. that Richard Branson must address shareholder claims that he concealed problems in the Virgin Galactic Holdings spaceship program and sold millions of dollars of stock at inflated prices. (see Reuters article, Richard Branson must face lawsuit in U.S. over Virgin Galactic space travel problems).
2023 has not been a good year for Richard Branson's dreams of space. His Virgin Orbit shut down in May 2023 when, just two years earlier, it was valued at 4 billion dollars. Virgin Galactic announced reduced space flights, will suspend all flights by mid-2024, and will reduce their workforce by eighteen percent while focusing on the next generation of spacecraft and aircraft. Weeks later, Richard Branson announced that since Virgin Galactic has sufficient capital to build and fly the next generation of aircraft and spacecraft, he will not provide additional capital (money) for Virgin Galactic. It is noted that Virgin Galactic has almost 1 billion dollars in cash and cash equivalents, spends close to 500 million dollars a year, and the new fleet is still two to four years out. Virgin Galactic’s stock is trading for less than two dollars a share. Branson has washed his hands of Virgin Galactic.
July 14, 2022, Virgin Galactic announced they were building their new 150,000 sqft manufacturing facility (at 5559 S Sossaman Road located on the Phoenix-Mesa Gateway airport), which would be operational in 2024.
And Boeing’s Aurora would be building the next generation of carrier aircraft. Since then, there has been no news from Aurora.
What is happening today?
On November 30, 2023, I visited 5559 S Sossaman Road in Mesa, Arizona. Where Virgin Galactic is building Its spaceship manufacturing facility. There were no Virgin Galactic signs on the site, but the construction personnel were aware that one or several buildings were for Virgin Galactic. As you can see, the hangers are for lease, and the developer lists one hanger of approximately 115,000, and a second hanger of 35,000 sqft has been leased. I expect the building shells and site work to be completed by the end of the first quarter 2024.
Virgin Galactic recently announced, “ Virgin Galactic Holdings, Inc (NYSE: SPCE) (the “Company” or “Virgin Galactic”), an aerospace and space travel company, today announced it has signed a long-term lease for a final assemble manufacturing facility for its next-generation Delta class spaceships. Located in Mesa, Greater Pheonix area, adjacent to the Phoenix area, and adjacent to the Phoenix-Mesa Gateway Airport, the facility will be capable of producing up to six spaceships per year. It will bring hundreds of highly skilled aerospace engineering and manufacturing jobs to the area.”
Virgin Galactic is advertising on LinkedIn for approximately twenty-six individuals for their existing Tustin and Mojave California locations. LinkedIn has yet to advertise job openings for their new spaceplane manufacturing facility at 5559 S Sossaman Road, Mesa, Arizona.
There is no word from Boeing’s Aurora, Virgin Galactic’s carrier airplane manufacturer, on their progress in building the two new carrier aircraft. Their website has not been updated from the initial July 2022 press release announcing being awarded the contract for the two carrier airplanes for Virgin Galactic.
At the current pace of progress, Virgin Galactic is likely to burn through its last eight hundred and seventy-five million dollars before the new fleet is fully operational.
Conclusion:
Virgin Galactic’s press release ends with the following statement, “ This press release contains certain forward-looking statements within the meaning of federal securities laws with respect to Virgin Galactic Holdings. (the “Company”), including statements regarding the Company’s spaceflight systems, markets and expected flight schedule. These forward-looking statements generally are identified as” believe”, “project”, expect”, anticipate”, “estimate”, “intend”, “strategy”, “future”, “opportunity”, “plan”, “may”, “should”, “will”, “would” and similar expressions. Forward-looking statements are predictions, projections, and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties.”
In 2005, Governor Richardson and his fellow Democrats bet half a billion of our hard-earned tax dollars on such “risks and uncertainties”. Governor Lujan Grisham has grown that bet to a billion dollars of our hard-earned tax dollars on such “risks and uncertainties”. For almost twenty years, Santa Fe Democrats have never asked Virgin Galactic for a financial guarantee for our billion-dollar financial commitment to them. Virgin Galactic’s last billion will soon be gone and we will hold the bag. That is negligence.
Lujan Grisham and the other Santa Fe Democrats focus our attention on “Pie in the Sky” dreams, so we do not see we are stuck at the bottom of all the states. In 2024, do not let those Santa Fe Democrats fool us again with “Forward-looking statements are predictions, projections, and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties.”
It is time to Throw the Bums Out.
I appreciate your support and recommendations.
We have had great successes in the past few years.
We were the first to report that Secretary of Interior Deb Haaland trampled the sovereignty of the Navajo Nation, resulting in an ethics violation investigation and tarnishing her rising star (Governor?).
We challenged the Albuquerque Journal's celebrations of thirty years of Mimi Stewart’s Teacher/Legislator accomplishments with Mimi Stewart has kept New Mexico’s schools at the bottom of all the states while only Sheryl Williams Stapleton faces trial for taking school money out the back door.
We changed the dialog on Virgin Galactic. New Mexico news articles are no longer an infomercial for Virgin Galactic. Every news article includes their troubling financial information. The last two times I knocked on Virgin Galactic’s door, they issued a press release putting a positive spin on what I uncovered: their Mojave Facility could not build their future fleet, and they were not constructing a new manufacturing facility but leasing newly constructed hanger space.
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We will provide more information on these changes in the coming weeks.