The markets this week are off to a better start than usual. With Russian tensions backing down just a bit, we’ve seen a corresponding rise in stock markets all around the world. Yesterday, one of the biggest winners was Richard Branson’s own space venture, Virgin Galactic (NASDAQ: SPCE). Shares skyrocketed after the company announced its space tourism flights, where you could travel up to the edge of space and come back, are now available for booking.
If you’re feeling adventurous enough, you’re now able to book a flight on a Virgin Galactic spacecraft for at least $450,000 in cash. Around one-third of that, or $150,000, is the immediate deposit, although most of this initial deposit is refundable in the event of cancellations. Booking options include single-seat purchases, couples, friends, and even entire flights.
“At Virgin Galactic, we believe that space is transformational,” said CEO Michael Colglazier in a press release. “We plan to have our first 1,000 customers on board at the start of commercial service later this year, providing an incredibly strong foundation as we begin regular operations and scale our fleet.”
So far, Virgin has had over 600 confirmed reservations on future flights, sold for a cheaper $200,000-$250,000 each. Some of the early initial flights were from volunteers as well.
The main concern that some analysts have about Virgin Galactic is whether its space tourism business will really be that popular in the long term. Compared to other space segments, such as rocketry or satellites, space tourism is considered one of the smaller markets in the broader space industry.
Although other big space companies, like SpaceX and Blue Origins, can also do space flights, Virgin Galactic is the only billion-dollar space giant that’s publicly traded on the markets. For that reason, it acts as a kind of barometer for the rest of the publicly traded space industry.
Shares jumped as much as 32% over the course of the day following the news. Compared to last year, however, shares of Virgin Galactic have tumbled over 78%. This is partly due to the company spinning off its promising satellite business, Virgin Orbit. Satellite launches are considered a more profitable area for space companies, at least in the short-to-mid term.
Wall Street currently expects Virgin Galactic to earn around $8 million a year in revenue in 2022. The other problem Virgin has is that it’s hard to scale up flights, requiring multiple craft and appropriate training along the way. A 1,000 customers, as Colglazier expects, would mean closer to $450 million in revenue. However, most experts think that’s far too optimistic at the moment, with many analysts downright bearish on Virgin Galactic even at these low price levels.
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
