The Strategist

Virgin Galactic is going to NYSE

07/10/2019 - 09:44

Virgin Galactic of the British entrepreneur Richard Branson, engaged in tourist suborbital space flights and launching artificial satellites, intends to become public. As it became known from The Wall Street Journal sources, the specialized company for targeted mergers and acquisitions (SPAC) Social Capital Hedosophia Holdings, which is listed on the New York Stock Exchange (NYSE), intends to acquire a 49 percent share in Virgin Galactic.

Land Rover MENA via flickr
Land Rover MENA via flickr
The deal, which may be officially announced on Tuesday, will make Virgin Galactic the first public company among those working in the field of launching spacecraft with a man on board. As the WSJ sources informed, Social Capital Hedosophia Holdings plans to invest $ 800 million in Virgin Galactic in exchange for a 49 percent stake.

Social Capital Hedosophia Holdings, a specialized company for targeted mergers and acquisitions, was created in 2017 by venture investor Chamath Palihapitiya, who had previously been one of Facebook managers. Shares of the company are traded on the NYSE. Like all SPAC, Social Capital Hedosophia Holdings was created to acquire any existing private company, and Richard Branson’s Virgin Galactic became the object of its interest. Negotiations on a potential deal have been going on for most of this year. At the same time, the sum of $ 800 million includes $ 100 million owned by Chamath Palihapitiya personally.

Virgin Galactic, established in 2004, is part of the Virgin Group of the British entrepreneur Richard Branson and is engaged in tourist suborbital flights and the launch of artificial satellites. At the moment, about 600 people have booked places in the company's aircraft, paying $ 250,000 for the opportunity to make a six-minute flight and go to orbit. In December 2018, the company carried out a successful suborbital flight, during which the Unity aircraft reached an altitude of 82.7 km above the Earth’s surface. In February, for the first time, Unity went into space with three people on board — two pilots and one passenger — and managed to climb to an altitude of almost 90 km.

Virgin Galactic expects that the proceeds from the deal with Social Capital Hedosophia Holdings will be enough to support the company's work until it starts to profit from commercial space launches.

Until now, Virgin Galactic has been invested mainly by Richard Branson himself, and his investments are estimated at $ 1 billion. An agreement reached in 2017 with Saudi investors to invest $ 1 billion in Virgin Galactic was terminated by Richard Branson in 2018 after the murder of the Saudi journalist in Turkey.