Virgin Orbit sold this note, worth $10.9 million, to Virgin Investments Limited. This note is convertible into shares of VORB stock, or into qualified securities. The annual interest rate on this note is 12% or 16% in the case of default. Its maturity date is Nov. 4, 2024.
Virgin Orbit already has a use for the funds from the senior convertible note. The company says it will use the money from this deal to cover the severance costs of employees that have been laid off.
According to a Securities and Exchange Commission (SEC) filing, Virgin Orbit is cutting 675 jobs, which represents 85% of its workforce. It expects to suffer charges of $15 million in connection to these job cuts.
What’s Behind the Job Cuts?
Virgin Orbit has been in a tough spot and was seeking out funding from a lender to keep its business going. However, things have turned south as the company has failed to secure the financing it needs to continue operations unhindered.
With today’s news comes heavy trading of VORB stock. As of this writing, some 11 million shares of the stock have changed hands. That’s already above the company’s daily average trading volume of about 5 million shares.
VORB stock is down 42.7% as of Friday morning.
Investors looking for more of the most recent stock market news will want to stick around!
We’ve got all of the hottest stock coverage traders need to know about on Friday! A few examples include why shares of Palisade Bio (NASDAQ:PALI) and Inpixon (NASDAQ:INPX) stock are up, and the biggest pre-market stock movers this morning. You can find all of this news at the following links!
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On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.