Virgin Galactic going public; merger OK’d

If everything goes as planned, Virgin Galactic will be able to sell shares to raise money, a potentially crucial advantage over rivals like Jeff Bezos’ Blue Origin.

Elon Musk’s SpaceX has, so far, been less focused on space tourism and is likely to compete more closely with another of Branson’s companies, Virgin Orbit.

Virgin Galactic’s SpaceShipTwo, being developed and meticulously tested at the Mojave Air and Space Port, is designed to carry passengers and science experiments to suborbital space. It has successfully flown twice into space.

As Allison Gatlin reported in the AV Press on Wednesday, Virgin Galactic has reservations for flights from more than 600 people, representing $80 million in deposits and $120 million in potential revenue, according to Branson’s news release.

The firm has invested more than $1 billion since 2004.

Social Capital Hedosophia’s founder and CEO is Chamath Palihapitiya. Along with his $100 million investment, (at $10 a share) he will become chairman of the combined company’s Board of Directors.

“Great progress in our test flight program means that we are on track for our beautiful spaceship to begin commercial service,” Branson said in the release. “By embarking on this new chapter, at this advanced point in Virgin Galactic’s development, we can open space to more investors and in doing so, open space to thousands of new astronauts. We are at the dawn of a new space age, with huge potential to improve and sustain life on Earth. I am delighted that SCH has decided to become such an important part of our amazing journey.  They share our dreams, and together we will make them reality.”

The merger includes The Spaceship Company, Virgin Galactic’s manufacturing arm located at the Mojave Air and Space Port, where the company is building the next two SpaceShipTwo vehicles.

The merged company will have an initial value of $1.5 billion, which is two-and-a-half times the projected revenue of $600 million by 2023, “as commercial operations are expected to achieve scale,” the release said.

Social Capital Hedosophia is a special purpose acquisition company, or SPAC, publicly traded companies that are formed for the purpose of acquiring or merging with existing companies.

“It is a privilege to partner with Sir Richard Branson, a once-in-a-generation visionary, to bring the reality of commercial spaceflight to the world,” Palihapitiya said. “We are confident that (Virgin Galactic) is light years ahead of the competition. It is backed by an exciting business model and an uncompromising commitment to safety and customer satisfaction. I cannot wait to take my first trip in space and become an astronaut.”

Mojave and the rest of our Aerospace Valley have prospered enormously from the multi-million dollar investments that have been funding this futuristic, exemplary program, which will continue to receive world-wide, highly visible publicity.