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Today the Shares of Richard Branson-backed Virgin Galactic has jumped as much as 7.7% in early trading on the New York Stock Exchange.
The move comes after the Galactic merged with Chamath Palihapitiya’s venture Social Capital Hedosophia that gave the new company a combined valuation of $1.5 billion. Branson kept a 51% stake in the business.
CEO George Whitesides said:
“Virgin Galactic is making history again today as it becomes the world’s first and only publicly traded commercial human spaceflight company. For the first time, anyone will have the opportunity to invest in a human spaceflight company that is transforming the market.”
Shares of Virgin Galactic rose as high as $12.93, up more than 9% and at the time of writing they were $12.40, that’s 5.17% more. The shares were listed before under the ticker IPOA for Palihapitiya’s special purpose vehicle, which took the rest of the 49% stake in Virgin Galactic.
Speaking to CNBC, Branson said that if the “public want to dabble a little bit in a spaceship company, own a little bit of a spaceship company, they can now do so.”
Virgin Galactic is directly competing with Elon Musk’s SpaceX and Jeff Bezos’s Blue Origin in order to become the first company to send fee-paying passengers into space.
The company was founded back in 2004 and has spent more than $1bn developing its program, which is far behind what was previously expected, and took a hit after a fatal accident in 2014.
For 2023, the company is predicting to make 270 trips to space, which would get it around $600m and generate a profit of more than $430m.
Around 600 people, including pop star Justin Bieber, have already put down deposits for the 90-minute experience at a price of about $250,000 per ticket, according to the company. The rocket-powered plane, called SpaceShipTwo, will reportedly fly to more than 40,000 feet while at the same time it will be tied to a massive mothership. Then, at some time, the space plane will disengage, turn on its engine and descend straight up with two pilots at the controls. At the top of the flight, travelers will be able to undergo a few minutes of weightlessness and could watch the Earth’s curved horizon and the darkness of outer space.
Two weeks ago the company announced its partnership with ‘Under Armour’ that is making spacesuit for its passengers. Under Armour CEO Kevin Plank then said:
“Going to space presents an entirely new challenge for us. We’ve had to put a dedicated team at the very best at Under Armour that’s been working day and night.”
Virgin Galactic Chairman Chamath Palihapitiya announced earlier this year that his company is starting spaceflight within a year’s time. Palihapitiya also said the company will become profitable within two years of time frame soon after the public listing. As per the company, Virgin Galactic will use the cash to build more spaceships. It said the funds will last for at least two years, by which time commercial space flights should begin bringing profits.
Interestingly, he also compares this business’s profit margin to be similar to a software company. Palihapitiya then said:
“What the team has built, and this is what was amazing to me, is a business that has software-like margins. This thing looks like a software business under the hood even though it’s flying people to space. This is, I think, a really compelling risk-reward,” said Palihapitiya.