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Virgin Galactic becomes first public space tourism company

Virgin Galactic founder Richard Branson celebrated with fireworks outside the New York Stock Exchange Monday. (Richard Drew/associated Press)Richard Drew/Associated Press

Virgin Galactic stock popped in its New York Stock Exchange debut Monday, with shares rising up to 8 percent as investors welcomed the first publicly traded space tourism company.

The Richard Branson company merged last week with Social Capital Hedosophia, a New York investment firm already listed on the NYSE, allowing Virgin Galactic to bypass the standard stock offering process. Social Capital Hedosophia took a 46.5 percent stake, giving Virgin Galactic a valuation of more than $1.5 billion.

Initially priced near $12 a share under ‘‘SPCE,’’ Virgin Galactic had climbed up to $12.93 before settling back near $12.23 by early afternoon. It ended the day down, at $11.75.


‘‘Virgin Galactic is making history again today as it becomes the world’s first and only publicly traded commercial human spaceflight company,’’ chief executive George Whitesides said in a statement. ‘‘For the first time, anyone will have the opportunity to invest in a human spaceflight company that is transforming the market.’’

The Virgin Galactic debut is a major milestone for the fast-growing space sector, which is projected to be worth $2.7 trillion by 2045, according to Bank of America Merrill Lynch. For years, it has been locked in competition with fellow billionaire-led enterprises, such as Elon Musk’s SpaceX and Jeff Bezos’s Blue Origin.

Virgin Galactic was founded in 2004 but suffered serious setbacks after a spaceship came apart during a test flight over the Mojave Desert in 2014, killing copilot Michael Alsbury. The company has raised more than $1 billion since its inception, but much of it came directly from Branson. Boeing recently invested $20 million for a 1 percent stake in the company, which said its first commercial flights would commence in mid-2020.

With the capital it raises by going public, Virgin Galactic said it will be able to sustain its operations until it begins commercial flights and starts generating its own revenue. The company estimates it will carry more than 1,500 tourists a year by 2023, according to a regulatory filing, and generate close to $600 million in revenue.


But it remains to be seen whether commercial space flight will truly take off. ‘‘No disrespect, but Virgin Galactic is both a plan and a dream, rather than a secure cashflow,’’ Swen Lorenz of Undervalued Shares wrote in a research note ahead of the NYSE debut.

Virgin has flown its vehicle SpaceShipTwo to the edge of space twice. The first flight, in December, was with two test pilots. The second, in February, had two pilots and a crew member.

More than 600 people in 60 countries have put down more than $80 million in deposits to join Virgin Galactic’s reservation list; that’s $250,000 a ticket.