- Virgin Galactic is set to go public soon as the first space tourism company.
- According to Branson, Virgin Galactic has made remarkable progress in its test-flight initiative.
- An annual record of profits will begin in 2021, and the first customers will be flown in this same year.
Virgin Galactic will set the record soon as it will become the pioneering space tourism firm to go public. It will involve a 49% acquisition of Virgin Galactic by Social Capital Hedosophia Holdings Corp. which trades on the NYSE under the ticker $IPOA.
Another striking facet of the deal entails an investment of approximately $800 million. In addition, the pact will finance its spaceships until operations can start making profits.
Social Capital Hedosophia advanced its shares by 2.6% in pre-market trading in the United States. Through a merger with this listed entity, Virgin will elude the requirement for a preliminary public offering.
In view of that, the company will avoid an expensive investor roadshow. It will also evade the challenge of trading shares in a firm whose plans were stalled for four years in 2014. During that instance, a space plane disintegrated, ending the life of one pilot and harming another.
According to billionaire Branson, Virgin Galactic has made significant steps forward in its program of testing flights and is on course to launch commercial services. In the words of Branson, the Los Angeles Times noted that the progress would allow the company to “open space to more investors and thousands of new astronauts.”
The market’s potential
In light of Branson’s remarks to CNBC, “the market is enormous.” He further explained that since the establishment of two spaceships into space at the beginning of this year, the company acquired five new astronauts.
Remarkably, these are the first astronauts to have been attained on U.S. soil since 2009. As a result, 2,500 individuals have asked to enroll.
A special acquisition
As Virgin Galactic prepares to go public, a distinctive company was created by Chamath Palihapitiya, a venture capitalist. One notable outcome of the merger involves sending the firm’s first tourists to visit space.
Palihapitiya will be the Virgin Galactic’s chairman, whereas the current management team will remain intact.
Striking projection: The combined company will have a $1.5 billion valuation.
The merger’s profitability
According to CNBC reports, Virgin Galactic projects are expected to make profits annually by August 2021. It is forecasted that the first customers will be flown in this year. This investment comes at the time the nascent space industry is making efforts to craft its business models.
Eventually, Virgin Galactic will compete at the same level with Elon Musks’ SpaceX and Jeff Bezos’ Blue Origin. Records show that hundreds of tickets at $250,000 per seat have been sold by Virgin Galactic.
However, Space Tourism Company is yet to actually make the dream of ticket holders dream come true on the planned 90-minute trip to space. It is worth noting that the VSS Unity, its passenger spaceline, made its maiden trip to space in December 2018. Completion of the transaction is expected based on the usual approvals.