Friday 15 November 2019

Launch: Branson's Virgin Galactic blasts off into the market on IPO mission

Blast off: Virgin boss Richard Branson at the New York Stock Exchange ahead of Virgin Galactic’s IPO
Blast off: Virgin boss Richard Branson at the New York Stock Exchange ahead of Virgin Galactic’s IPO

Bharath Manjesh

Richard Branson's Virgin Galactic Holdings started trading on the New York Stock Exchange on Monday, becoming the first space tourism company to hit public markets. The stock opened at $12.01 (€10.82).

The company was created from the merger between British billionaire Branson's Virgin Galactic and former Facebook executive Chamath Palihapitiya's publicly-traded shell company, which invested $800m for a 49pc stake.

Merging with an already public company allowed Branson's space venture to sidestep the traditional initial public offering (IPO) process, including filing extensive paperwork with the US SEC.

The listing comes during a dry spell for IPOs, following failed attempts including that of office-share startup The We Company and disappointing debuts such as fitness startup Peloton Interactive.

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Branson, with a 51pc stake, retains control of the company, which had a market cap of $2.3bn following the announcement of the merger completion on Friday. Palihapitiya is chairman of the combined company.

Branson is racing against competitors Blue Origin, the space business of Jeff Bezos, and Elon Musk's SpaceX to bring tourists into space.

Virgin boss Richard Branson. Photo: Reuters
Virgin boss Richard Branson. Photo: Reuters

Hundreds of people from 60 countries, including actor Leonardo DiCaprio and pop star Justin Bieber, have paid or put down deposits to fly on one of Virgin's suborbital flights.

A 90-minute flight, which will allow passengers to experience weightlessness, costs about $250,000.

Virgin's current reservations represent about $80m in total collected deposits and $120m of potential revenue.

The company has attracted a $20m investment from Boeing to commercialise space. Earlier this month, Virgin Galactic revealed a line of 'spacewear' developed in collaboration with sportswear maker Under Armour.

Reuters

Irish Independent

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