Commodities

Virgin Galactic near public debut, growing business globally


Virgin Galactic founder Richard Branson models the company’s new line of spacewear made by Under Armour.CNBC | Michael SheetzRichard Branson’s space tourism venture is closer to listing its shares publicly than some may expect and, once it begins flying regularly, the billionaire founder told CNBC that Virgin Galactic will look to expand its business around the world.Virgin Galactic is preparing to become the first human spaceflight company to go public. Through a merger announced in July with Social Capital Hedosophia (SCH), a special-purpose acquisition company created by venture capitalist Chamath Palihapitiya, the company is planning to list on the New York Stock Exchange.While the company has said it plans to list in the fourth quarter of this year, Branson hinted on Wednesday that it may be in the early part of these next three months.”It’s not long now” until Virgin Galactic lists, Branson told CNBC during the company’s unveiling of its spacewear collection with Under Armour.Once the merger closes, Virgin Galactic will have a valuation of $1.5 billion, with SCH retaining a 49% stake. Branson confirmed that he will retain his majority stake even after the company lists, saying he has no plans to sell his shares.”I will retain control of the company,” Branson said. “I will keep roughly 51%.”Palihapitiya sees Virgin Galactic as “a business that has software-like margins,” telling CNBC in July that he believes there is a “really compelling risk-reward” behind space tourism. UBS, in a March report, estimated that space tourism has a potential market of $3 billion a decade from now, even though it’s “still at a nascent phase.”Virgin Galactic’s spacecraft can carry as many as six passengers, along with the two pilots, to the edge of space. The spaceship is dropped from a jet-powered aircraft and fires a rocket motor, reaching over three times of the speed of sound as it climbs though the Earth’s atmosphere. Then the spacecraft and its passengers float weightless for a few minutes, before gliding back down to land on Earth much like a traditional aircraft.A ticket for a Virgin Galactic flight goes for about $250,000 per person and the company has a backlog of 603 customers waiting to fly.Expanding Virgin Galactic’s business internationallyVirgin Galactic has testing facilities in California’s Mojave Desert and has an agreement with Spaceport America in New Mexico for the first commercial flights. But Branson says that’s just the beginning for the space tourism business, as the company is talking about expanding across several continents.”Abu Dhabi would like us to do a spaceport there and we’re in discussions with them,” Branson said. “Italy would like us to do a spaceport there. Great Britain wants us to do a spaceport. Australia talked to us about doing a spaceport.”Virgin Galactic is also looking to do begin operations “in a few other Asian countries,” CEO George Whitesides said. But perhaps the most fascinating opportunity may be in Scandinavia, as the company is speaking to Sweden about flying into the region’s spectacular night sky.”We’ve talked about going up into the Northern Lights,” Branson said. “It would be ridiculous.”As for the company’s first commercial flights, Branson expects to be on the first one – yet left it a mystery as to who else will fly with him.”We have an announcement to make, so I’m not allowed to talk about it,” Branson said. “Sometime next year I will be taking somebody up but I will have to let you know.”

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