Virgin Galactic brings space tourism to public markets as New York float beckons
Investors will get their first chance to buy into a space tourism firm tomorrow, when shares in Sir Richard Branson’s Virgin Galactic start trading in New York.
The company tied the knot on a merger with a US investment vehicle late on Friday, meaning it will go public when markets open tomorrow, in what its chief executive called “the start of a new era” for the human spaceflight industry. Branson told City PM last week he would travel to New York to ring the bell himself.
The company, which flew to the edge of space with a passenger for the first time earlier this year, has received $570m (£444m) as part of the deal, and received a $20m investment from US aerospace giant Boeing.
Including Branson’s own $880m investment, which gives him a 40 per cent stake, plus cash from Abu Dhabi sovereign wealth fund Mubadala, Virgin Galactic is valued at $2.3bn.
However, getting to this stage has been no walk in the park, Branson said.
“It almost bankrupted the Virgin Group,” he joked at an event in Israel on Thursday. “We’ve spent a lot of money on Virgin Galactic and [sister venture] Virgin Orbit.”
“It will be good to actually involve the public and so my chairman will still talk to me.”
That man is Peter Norris, the chairman of Virgin Group – the parent company of firms including Virgin Media, Virgin Atlantic and Virgin Trains. He and other senior figures at Virgin expect shares to be stable on Monday because the investment vehicle, called Social Capital Hedosophia (SCH), has been trading on US markets since 2017, and traders have known about the deal since summer this year.
Nevertheless, SCH’s stock rose sharply towards the end of last week, after Branson set a date for Virgin Galactic to hit the markets.
Virgin Galactic plans to launch the first commercial flights next year, with revenue forecast to hit $431m by 2023. A ticket for one of its flights sells for around $250,000 per person, and the waiting list – which includes pop star Justin Beiber and Leonardo DiCaprio – is 603 customers strong.
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The commercial space race is heating up as Virgin Galactic competes with rivals such as Blue Origin, backed by Amazon’s Jeff Bezos, and Elon Musk’s Space X.
Branson even raised the possibility of a lunar hotel as the next step. Instead of focusing on humans inhabiting Mars – an idea floated by Bezos – Branson’s vision suggests a possible tourist industry.
“We’re looking at creating something like a Virgin Hotel in space,” he told City PM last week.
“It may develop into that [colonising Mars]. But I think that we feel a hotel in space would be better – maybe just on the Moon – than actually colonising.”
George Whitesides, CEO of Virgin Galactic said on Friday: “Today is the start of a new era for the human spaceflight industry. Virgin Galactic has already pioneered several important space milestones, including sending the first test passenger to space onboard a commercial vehicle, and today’s announcement is no different.
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“Now that VG is a publicly traded company, anyone can invest in a human spaceflight company that is striving to truly transform the market and be part of the excitement of the commercial space industry. I am proud of the strong flow of customer deposits and interest we have earned to date, and look forward to making the dream of spaceflight come true for our amazing astronaut customers.”