Investors were paying close attention to one particular company this weekend. Billionaire Richard Branson’s own space company, Virgin Galactic (NASDAQ: SPCE), officially launched its first commercial space flight. Leading up to the event, investors have been buying up Virgin Galactic stock, anticipating that a successful space flight would kick off a new era for space-related enterprises. At the same time, there was a lot of nervousness, as it’s easy for a space flight to go wrong. As it turned out, the entire flight turned out to be a complete success without any major hiccups or problems.
Richard Branson and a crew of five other people successfully reached the edge of space for a few minutes before returning safely to Earth. Although the Sunday morning flight was short-lived, it was an important proof of concept for the budding space tourism market. Branson plans to initiate commercial service sometime in 2022, charging passengers hundreds of thousands of dollars for each of these short space flights.
“We’re here to make space more accessible to all,” said Branson in a statement following the flight, adding that “I’ve been itching to go, and they said they wanted somebody to properly test the astronaut experience…and I was damned if I was going to let anyone take the seat.”
For the most part, space travel has been firmly within the domain of public institutions, like NASA. However, new space startups from billionaires like Elon Musk, Jeff Bezos, and Richard Branson are all helping push towards a stronger private space economy. Although space tourism is expected to become a growing industry, the main short-term market for space-related enterprises involves putting satellites into space. That’s not to mention the rockets required to put these satellites into orbit.
According to UBS, space tourism could generate around $4 billion per year in annual revenue by 2030. In contrast, the satellite industry is expected to grow to over $100 billion, with rocket-related services growing to a fraction of that size as well.
Another reason why investors have been so focused on Virgin Galactic is that it’s one of the few space-related stocks that are currently publicly listed. Both SpaceX and Blue Origins, companies started up by Musk and Bezos respectively, are still privately held. As such, buying Virgin is seen as a proxy investment for the general space industry.
Leading up to the actual event, shares of Virgin Galactic were actually dipping down around 6.6%. However, following the flight’s success, the stock is currently jumping around 10.3% in premarket trading. Over the past six-months, Virgin’s market cap has risen more than 84.5%, coming close to $11.8 billion as of writing. Expect shares to continue surging once Monday’s markets open up in U.S. markets.
Virgin Galactic Company Profile
Virgin Galactic Holdings Inc is a United States-based vertically-integrated aerospace company pioneering human spaceflight for private individuals & researchers, and it also manufactures advanced air and space vehicles. Using its technologies, it is developing a spaceflight system designed to offer its customers a unique, multi-day, and transformative experience. This culminates in a spaceflight that includes views of Earth from space and several minutes of weightlessness that will launch from Spaceport America, New Mexico. – Warrior Trading News
