Virgin Galactic (VGX, Las Cruces) started trading in an Initial Public Offering (IPO) on the New York Stock Exchange on October 28, a move that founder Richard Branson believes is crucial to compete with fellow billionaires Elon Musk (SpaceX) and Jeff Bezos (Blue Origin) in the nascent space tourism market.
Shares began trading after Virgin Galactic closed a merger last week with Social Capital Hedosophia, an investment firm founded by former Facebook executive Chamath Palihapitiya. The space travel company achieved a valuation of around USD2.3 billion on its market debut, Reuters reported.
Branson retains control of the company with a 51% stake, while Social Capital invested USD800 million for a 49% stake. Palihapitiya is the combined company's chairman.
The plan of the IPO is to raise funds after Virgin Galactic suspended discussions with Saudi Arabia’s Public Investment Fund for a planned USD1 billion investment following the murder of Saudi journalist Jamal Khashoggi.
Virgin Galactic has not yet achieved a profit and posted a net loss of USD86.7 million for the first half of 2019. This is despite the fact that hundreds of people from 60 countries have paid deposits or in full to fly on one of Virgin’s suborbital flights. A 90-minute flight including several minutes of weightlessness costs around USD250,000.
