Virgin Atlantic, the airline Richard Branson, filed Tuesday for protection in U.S. bankruptcy. Earlier this year I also saw headlines that Richard was pleading to the British government for financial help evening offering his Caribbean island resort as collateral for a loan.
But it’s great to diversified when investing and as a businessperson.
In late October, Virgin Galactic debuted on the New York Stock Exchange and became the first publicly traded space tourism company. Virgin Galactic Holdings, Inc., an aerospace company, develops human spaceflight for private individuals and researchers.
The company announced a goal the beginning of 2020, to send its founder, Sir Richard Branson, into space this year, for this 70th birthday. The company also has plans to scale operations with an estimated 16 flights to take place this year, 115 next year and 270 by 2023. But today they have little to no revenue or earnings.
Virgin Galactic Holdings Inc. reported no revenue in the second quarter and has collected less than $200,000 in 2020, but it expects to pull in millions more by selling fresh stock.
The space-tourism company reported second-quarter losses of $62.5 million, or 30 cents a share, Monday afternoon after posting losses of 19 cents a share on sales of about $600,000 in the same quarter a year ago. In a filing with the Securities and Exchange Commission, the company also declared that it expects to sell roughly 20.5 million fresh shares, which would pull in almost $500 million at the going rate.
Virgin Galactic shares SPCE, -2.51% declined as much as 9% in after-hours trading immediately following the release of the results and announcement of the stock offering.
Virgin Galactic is one of those special-purpose acquisition companies (SPAC). SPACs are publicly-traded shell companies with the intention of buying another company or companies. SPACs are called “blank check” companies because to begin with, there is no business. Social Capital Hedosophia Holdings that was launched by venture-capital investor Chamath Palihapitiya, merged with the space-tourism company to form Virgin Galactic a publicly traded entity,
Virgin Galactic has not set an exact date for when it will begin taking tourists into space, but did unveil plans for their Mach 3 delta-wing aircraft with capacity for 9 to 19 people traveling at an altitude of 60,000 feet.
However, the stock sold off after announcing the company announced another 20 million shares of its common stock would be sold to raise $460 to keep the business afloat. If you believe in hypersonic flight/transportation longer term, one may want to consider adding a little Virgin Galactic to their portfolio as price approaches the daily demand at $18.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.
