Richard Branson’s Virgin Galactic faces a significant setback as company shares experienced a sharp decline following the news that Branson would no longer be investing in the space tourism venture. The entrepreneur acknowledged the financial constraints of the Virgin Group in an article published in the Financial Times on Sunday, stating that the company did not have the “deepest pockets” and ruled out injecting additional funds into Virgin Galactic.

Branson revealed that Virgin Galactic currently holds around $1 billion, which he believes should be sufficient for the company to operate independently. This announcement contributed to a substantial drop in Virgin Galactic shares, with a nearly 59% decline year over year as of Tuesday afternoon.

Founded by Branson in 2004, Virgin Galactic went public in 2019 through a SPAC merger. However, the company has faced scrutiny, particularly during the summer, when it announced its first space tourism flight shortly after the tragic incident involving the Titan Submersible, resulting in the loss of five tourists.

Financial challenges loom over Virgin Galactic, with estimated operating losses totaling $1.5 billion between 2018 and 2022. In November, the company responded to financial pressures by reducing its staff by 18%. Despite these difficulties, Virgin Galactic continues to offer tickets priced at $450,000 for individuals interested in participating in a space tourism mission following a successful launch in August 2023.

The decision by Branson to halt further investment raises questions about the future trajectory of Virgin Galactic and underscores the financial strains faced by the space exploration company.