Taking flight: Virgin Galactic goes public in space tourism first

Sir Richard Branson’s Virgin Galactic Holdings Inc 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 and was up slightly by mid-afternoon.

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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 49 percent 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 United States Securities and Exchange Commission.

The listing comes during a dry spell for IPOs – following a failed attempt by The We Company, parent of office-space sharing company WeWork, and disappointing debuts such as that of fitness startup Peloton Interactive Inc.

Branson, with a 51 percent stake in Virgin Galactic, 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 including Blue Origin, the private space company founded by Amazon.com Inc chief Jeff Bezos, and SpaceX, created by Tesla Inc founder Elon Musk, to launch tourists into space.

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.

Some of Virgin Galactic’s ticket holders have been waiting more than 14 years for their trips. A 90-minute flight, which allows passengers to experience a few minutes of weightlessness, costs about a quarter of a million dollars.

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

The company has attracted a $20m in investment from the Boeing Company to commercialise space. Earlier this month, the company announced spacewear for passengers developed in collaboration with sportswear maker Under Armour, Inc.