Virgin Orbit nears deal from VC investor: Report

Yahoo Finance Live anchors Julie Hyman and Brad Smith discuss the rise in stock for Virgin Orbit following reports that the company is working on a $200 million infusion from Matthew Brown, a venture capital investor.

Video Transcript

JULIE HYMAN: To bring it back to another stock that I think is sort of getting memey, which is Virgin Orbit, which actually has some news today. The company, remember, effectively shut down last week and now says it is targeting an incremental resumption of operations, that they're going to start Thursday this week. They're going to return some of their team to work here.

Reuters also reporting the company is working on a $200 million infusion from a venture-capital investor, Matthew Brown. So that seems to be helping.

But again here you have to consider the short interest in pretty much any of these very small-cap, memey kind of names as playing a role when you've got this kind of upside.

BRAD SMITH: Yeah, for Virgin Orbit, the story has been and continues to be the headwinds that they face as a result of their own launches and those launches not going successfully and how costly those launches are. So impacting the amount of cash that they're able to still deploy just to operate on a day in, day out basis and make sure that they can pay people at the end of the day.

And so within that, I think it's really just a matter of how they are able shore up capital in this near-term period of time and get confidence from any lender that would be able to give them that infusion of capital, that they're going to be able to be paid back one day. And the of course, alternative, as we have seen over the past week, is far more dire when you do have a company that essentially says, all right, yeah, we've got to shut down the operation just to figure out how we can go on existing.

But, I mean, it's a significant mission that the company holds on to and trying to make sure that within all of the launches and the satellites that are a larger component and the payload that they're trying to put into orbit as well. I mean, it could pay off, but it's just a matter of when, how, and will they have enough capital and cash to deploy towards just that operation and making sure that it's sustainable over the long-term period of time to get to profitability?

JULIE HYMAN: Well, today the stock's going to the moon.

BRAD SMITH: Ooh.

JULIE HYMAN: Sorry. Kind of.

BRAD SMITH: As they say get to banks in our ear.