‘For a young company in today’s market, the key theme will always be cash’: Q&A with Virgin Orbit’s new head of IR
Having just been named IR lead at Virgin Orbit, the arm of Sir Richard Branson’s aerospace companies that deals with satellite launches, Stephen Zhang talks to IR Magazine about joining a young company that went public via a special purpose acquisition company (Spac) at the tail end of 2021, the company’s roadshow plans – and how an internship 14 years ago led him to IR today.
What excites you most about your new role?
Growth – not just the financial side of our business, but also growing together as a company as we evolve from a private to a public company. It’s exciting to be part of something young, fresh and new where I can help shape the future and drive meaningful change.
What are your priorities going into the position?
Going into this new role, two key priorities come to mind, one internal and one external.
On the external side, being a newly public growth company, it’s important to develop relationships with the investment community and demonstrate who we are and what value we bring to the space sector. We need to tell our story in an effective, credible and consistent manner. It’s my responsibility to do that, and relationships are key.
On the internal side, process is my focus. We are doing things for the first time in many areas and it’s crucial to have a solid foundation of processes for earnings, SEC filings, conferences, investor outreach, and so on. This is where I will lean heavily on my experience the last four years as a part of the Raytheon Technologies IR team. As you can imagine, mature processes are key for a company of Raytheon’s size and history. I plan to adapt to an approach that best suits Virgin Orbit.
In what ways does the Virgin Orbit IPO shape your approach to IR (if at all)?
Virgin Orbit become public through the Spac process – as have many companies these last few years. As you know, in today’s market, many newly public growth companies have seen their valuations impacted. My approach here is to tell the story that is Virgin Orbit and demonstrate value that the public markets might not yet appreciate.
We are not a pre-revenue company, and we have a satellite launch vehicle with a 100 percent success rate through our first three launches. This, along with our unique, differentiated, air-launch technology, creates a compelling story, and it’s my job to showcase our developments relative to other companies that may still be in the earlier stages.
What do you expect the key themes of conversation to be with investors and analysts over the coming 12-18 months?
For a young company in today’s market, the key theme will always be cash and with that, how much cash you have and when you will achieve cash flow break-even. As a company, we understand how critical this metric is to the investor community and will be laser-focused on accelerating cash and our break-even targets.
Do you currently have any roadshow plans? If so, what format (virtual/in person/hybrid) are you planning and where will you be visiting?
Yes, we have both roadshow and conference plans this year. Conferences have started to come back to an in-person format, while roadshows with targeted investors have been more hybrid. As for location, we tend to meet investors in New York and Boston, as you’d expect. But we’ve also hosted investors in our Long Beach, California headquarters and I always remind analysts that it’s not a bad place to visit!
What areas of your past experience do you think you’ll lean on most in this position?
As the lead for IR at a newly public company, I plan to lean heavily on my communication and process maturity skills. Developing and implementing new processes will be key and, along with that, you need to be an effective communicator to the investment community. These combined skills are the building blocks for a successful investor relations program.
Finally, what do you think you’d be doing if you didn’t work in corporate finance?
If it wasn’t for my internship 14 years ago, I would almost certainly be in the real estate business. My parents are both in that business and I grew up around it. But I was fortunate to find an internship, which led to a full-time corporate finance role in a difficult market back in 2008 and 2009. Hard work and dedication led me to where I am today, and the rest is history!