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What Do You Think Of Virgin Galactic Holdings?

by Alan Daniel
Virgin Galactic Holdings Space Travel

Virgin Galactic Holdings and the emergence of Space Travel

I’ve written a little bit about Virgin Galactic Holdings before here on GeekInsider but I’ve never gone in depth on it. Today’s the day I look at Virgin Galactic, view its prospects and look at what it has done so far. 

First, it is a public company that trades under the ticker $SPCE. It has had a wild ride since its debut on the stock market, it shot up to $36.00 before being humbled by COVID-19. 

A few think that it is an early stage space transportation play making it a venture capital investment. Others think that it might become the Berkshire Hathaway of the space industry. They think that it can be one of the companies that contributes to and captures a portion of the expected $1.8 trillion space economy.

Then there are pockets of disbelief, of doubt, where people think that $SPCE or Virgin Galactic Holdings will not find initial success and might even have some fatal accidents.

That is what makes Virgin Galactic Holdings so compelling to think about right now. Let’s find out more about the space firm.

Virgin Galactic History

The spaceflight firm was founded in 2004 by Sir Richard Branson and began trading publicly in November 2019. It aims to take on two primary activities, suborbital spaceflight flight to wealthy individuals and provide suborbital launches for space activities. He wanted to conduct spaceflight and make significant progress but has been delayed due to different events. 

Space flight is hard, but the company kept pushing through and did meet a significant milestone.

Virgin Galactic achieved suborbital spaceflight with the VSS Unity in late 2018 and hit an altitude of (51.4 mi., remember that a normal commercial airplane reaches about 5.9 to 7.5 miles). A recent flight took place in February 2019 with a third passenger onboard, Beth Moses!  She became “the first non-pilot crew member to fly on a commercial space vehicle, fly at faster than Mach 3 and unstrap and float freely in space in a commercial space vehicle” according to a recent earnings report.

VG started out as a marketing organization before becoming more competent in critical areas such as “designing, building, and flying a rocket motor.” The first human spaceflight company has experienced a variety of delays and aims to conduct the first human spaceflight with customers over the next few years.

Cost To Fly Higher with Virgin Galactic Holdings

Space Tourists must fork over $250,000 to fly with Virgin Galactic Holdings. Tickets originally went for around $200,000 but became more expensive over the past few years. The Sunday Times notes that the company received at least $80 million in deposits. Customers are anxious to realize and experience their suborbital flight and have waited for quite a while.

The first commercial flight by Virgin Galactic Holdings, according to my estimations, might occur by mid to late 2021 based on past history.

Does Virgin Galactic Holdings Generate Money?

The short answer is not yet. 

Yes, it has a couple hundred million dollars (536 million as of December 2019), a few publicly traded shares, and a horizontal spaceflight dream. At present, it has minimal revenues and burns significant value in the current building phase. The firm has obligations which it has yet to meet. 

Virgin Galactic CEO, George Whitesides noted in a recent earnings call “we have over 600 reservations and approximately $80 million in deposits, representing over $120 million of potential revenue. Registrations of interest continue to grow at a rapid pace and currently stand at 7,957 as of February 23, 2020, more than doubling since our last update in 2019.”

What to Watch with Virgin Galactic?

The suborbital space flights are a must watch. 

The first few will be of critical importance for a company that has been in this sector for so long and has made quite a bit of promises for flights early on. One key question here is, when will Sir Richard Branson go into space? The company expects it to be 2020 but we’re almost halfway through and the coronavirus has likely placed a dent in the timetable. We see that the company has diverted some efforts to making necessary items such as ventilators and other items for those affected by the virus. Expect a flight closer to 2021 or 2022.

When the company executes these missions then they can justify price points and increase it further due to more expected demand. Further delays might cause problems in demand.

The second component is that of its practical research on high performance passenger flights, if the company is successful in learning and applying this in the future to traditional travel, it can significantly cut travel time over long distances. 

This aspect of hypersonic business travel is one reason why Boeing through Boeing HorizonX is a minority owner in the company. Further, we want to see how they will continue to grow their partnership with the troubled Boeing firm and earn more potential revenues. 

Virgin Galactic seeks to tap into a global group of 1.8 million high networth individuals, classified by VG as people with more than ten million in net asset value. A pool that should increase at a rate greater than 5% over the next three years.

Research and initiatives led by the Spaceship Company within Virgin Galactic as it will be a key driver in future revenue growth if and when hypersonic travel pans out. Virgin Galactic has come a long way but it still has further to go to cement itself in the space industry. It is still burning through cash as it seeks to engineer its systems and build further interest. It is an exciting company that is in a highly competitive sector. It is the first public space oriented human flight company that has significant potential but substantial risk as well.

Follow along on Geek Insider as we look at future earnings reports and find out how this company is progressing to meet major milestones.

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