Virgin Galactic, founded by billionaire Richard Branson, used to be the big name in space tourism before it was passed by SpaceX and Blue Origin. The company struggled through the 2010s, especially after a fatal crash in a test flight in 2014 and the cutting of ties with Saudi Arabian investors after the murder of journalist Jamal Khashoggi. But since then, the company has flown two successful crewed spaceflights and assembled a new team of investors.
And now Virgin Galactic will become the first private spaceflight company to become a publicly traded entity. However, the company’s IPO is non-traditional, in that it is merging with a company that is already listed on the stock market. The special purpose acquisition company (SPAC) created by Social Capital SP Chief Executive Officer Chamath Palihapitiya. The SPAC, known as Social Capital Hedosophia Holding Corporation, will go public before the end of this year.
Palihapitiya will be the chairman of the combined company, and the partnering investors will own up to 49 percent of the shares.
The deal is set to raise more than $800 million, of which $300 million will go toward the purchase of shares from existing shareholders.
“[This type of IPO] offers certain advantages over doing a conventional IPO in the sense that it essentially has already raised the money itself, and so the time commitment for the management is somewhat reduced,” Virgin Galactic CEO George Whitesides told CFO Magazine. “Shareholders can have liquidity and the company can take advantage of public markets.”
According to the company, they have already collected $80 million in deposits from over 600 people hoping to be the first tourists in space. Those passengers will put in another $120 million before they buckle their seat-belts, but that’s still not enough to fund the needs of the company. For comparison, Blue Origin costs Jeff Bezos personally around $1 billion in stock each year and SpaceX spends $60 billion per year on research and development alone.
“We know that millions of people are deeply inspired by human spaceflight, would love to become more involved and, ultimately experience space for themselves,” said Branson in a prepared statement. “By taking Virgin Galactic public at this advanced point in its development, we can open space to more investors and in doing so, open space to thousands of new astronauts.”
Private space travel will be the next wave of human history. It will also be the next great status symbol. Tickets from the various companies range between $250,000 and $400,000, so seats will be reserved for the super-rich for many, many years to come, but it provides a glimmer of hope that commercial space travel may become available to more people in the future.
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