Billionaire Sir Richard Branson is done putting money into space start-up Virgin Galactic Holdings (SPCE 3.15%), and investors are not sure the company will have enough cash to make it on its own. Shares of Virgin Galactic were trading down by more than 15% as of 10:30 a.m. ET Monday on investor disappointment over Branson's declaration.

Sir Richard heads to the sidelines

Virgin Galactic launched as a public company in 2019 to great fanfare, in part because of the prominent role its charismatic founder played in promoting it. But the space company has struggled since, missing its self-declared deadline to begin commercial flights in 2020 in time for Branson's 70th birthday.

Branson himself did fly into space a year later, and Virgin Galactic's space tourism business is now producing revenue. But the company earlier this year said it intends to scale back the number of flights it conducts heading into 2024 to focus its resources on its new Delta space vehicle.

The company believes it has sufficient cash in the bank to fund the Delta's development. But given that the new spaceship is not expected to enter revenue-generating service until 2026, there is a long period of uncertainty up ahead for Virgin Galactic shareholders.

In theory, Branson could provide a backstop should things go wrong, or if the Delta development proves more costly than the company expects. But Branson told the Financial Times he is not planning any further investment in the company.

"We don't have the deepest pockets after COVID, and Virgin Galactic has got $1 billion, or nearly," Branson told the newspaper. "It should, I believe, have sufficient funds to do its job on its own."

Down big in 2023, is Virgin Galactic a buy?

After Monday morning's drop, Virgin Galactic is now about 70% below its highs for the year. The Branson update is not a thesis changer, as few believed the billionaire was eager to sink more cash into the company. But it does remove one potential catalyst at a time when there are few reasons to get excited about the stock.

Assuming the Delta's development goes as planned, the best-case scenario for Virgin Galactic shareholders is that the stock will start to gain momentum by 2025. But Virgin Galactic has a history of missing deadlines, and a lot of things could go wrong on the way to bringing the Delta into service.

Given the challenges this company faces, investors would be wise to follow Branson's lead and stay on the sidelines, at least for the time being.