Next frontier: Wall Street
Space tourism firm Virgin Galactic plans to go public
Before Virgin Galactic starts bringing human beings closer to the cosmos launching from New Mexico’s Spaceport America, Richard Branson’s space tourism company has set its sights on another new frontier: the New York Stock Exchange.
The British billionaire announced Tuesday that Virgin Galactic planned to become the first human spaceflight company to go public via a merger with a New York investment firm. Social Capital Hedosophia will take a 49% stake in the company, which will be valued at roughly $1.5 billion. The firm’s chief executive, Chamath Palihapitiya, will invest an additional $100 million in the combined enterprise at $10 per share and become its chairman. The listing is expected before the end of the year.
The move is a major shift for a company that has been funded largely by Branson’s personal fortune as it struggled to get its commercial operations underway, and start generating real revenue.
With the capital it raises by going public, Virgin Galactic said it will be able to sustain its operations until it begins commercial flights and starts generating its own revenue. Six hundred people in 60 countries have put down more than $80 million in deposits to get on Virgin Galactic’s reservation list, ultimately signing up to pay as much as $250,000 a ticket; the company’s customer backlog alone would double the number of people who have ever gone to space.
“Great progress in our test flight program means that we are on track for our beautiful spaceship to begin commercial service,” Branson said in a statement. “By embarking on this new chapter, at this advanced point in Virgin Galactic’s development, we can open space to more investors and in doing so, open space to thousands of new astronauts.”
At a news conference in Santa Fe in May with Gov. Michelle Lujan Grisham, Branson and company CEO George Whitesides reiterated the company’s commitment to New Mexico, announcing it was moving its test flight program to the Spaceport near Upham, about 50 miles north of Las Cruces, after moving its passenger rocket ship and its mothership to the state. The mothership carries the passenger vehicle on its underbelly to about 45,000 feet, where it then detaches and fires its rockets to shoot into suborbit at 50 miles up.
The company expects to have about 150 employees in New Mexico by the end of the summer, although it remains headquartered in Mojave, where it’s building two more passenger vehicles and another mothership. It will conduct its space tourism operations at Spaceport America.
Whitesides said the company’s public offering will not alter its plans in New Mexico.
“It’s another positive step forward for the company, a positive endorsement of what we’re doing,” Whitesides told the Journal. “We’re still working hard to move our folks to New Mexico. Our team members are looking for housing now.”
Branson has said he intends to fly this year. But Whitesides said, “we have a few more test flights.” He added he was aware that “obviously Richard is eager to fly.”
The public listing would represent a major milestone for the fast-growing space sector, which could be worth $2.7 trillion by 2045, according to Bank of America Merrill Lynch. The competition includes Elon Musk’s SpaceX and Jeff Bezos’ Blue Origin.
“We are confident that VG is lightyears ahead of the competition,” Palihapitiya said in a statement.