Lift off for the First Space Stock
Launch day is here for Virgin Galactic, the first space tourism company to venture onto the New York Stock Exchange. This is a “new era for the human spaceflight industry,” according to its CEO, and investors are hoping returns will be out of this world!
Anyone can now join Richard Branson as an owner of Virgin Galactic (VG), listed under the ticker, SPCE. The concept is simple! Strap-hanging space cadets, including Leo DiCaprio and Justin Bieber, pay $250,000 to joyride through the cosmos, while back down on Earth, investors count the pennies. So far, Virgin Galactic is valued at an eye-watering $1.5 billion!
That’s a steep sum, especially considering $1000 will only send a hamburger into space right now. It’s a good thing this interstellar industry is still in its infancy. Some stock pickers believe that number will change with rocket improvements.
On the flip side, it’s still a high-risk investment. Growth prospects don’t always equate to money-making prospects, and competition from Amazon’s Blue Origin could bring optimists back down to Earth!
Remember, space tourism is only the first cubbyhole of cosmonautical commerce. Space manufacturing, satellites, space debris clearance, launch services, asteroid mining, lunar resources, and cargo transportation, are all to come for investors.
Social Capital Hedosophia already owns 49% of Virgin Galactic, and as a SPAC, its job is to merge with VG and help it safely aboard public markets. With a “gently does it” direct offering, that’s mission accomplished. Analysts reckon the stock will trade flat today, but with the space business proving so divisive on Wall Street, we wouldn’t count on it!