Author Topic: Virgin Galactic merger to make it publicly traded  (Read 82115 times)

Offline meekGee

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Re: Virgin Galactic merger to make it publicly traded
« Reply #20 on: 07/10/2019 12:30 am »
If they are so close to real flights, why the hurry?  Wouldn't they get a much better valuation after passenger flight #1?
'

Because they're still not anywhere close to generating significant revenue and they need another massive cash infusion to get there?

Quote
Having reached these milestones, the Board of VG believes that the additional capital provided by the merger with SCH will provide the company with the support needed to reach commercialization.
They were saying that this current ship is practically ready..  Branson is itching to go, etc...

Why not make a flight, prove themselves, and THEN go public?

The only answer I can see is that indeed they are not as close to flight as they hinted.

They also have a problem that soon people will realize that every p2p passenger is also an "astronaut", not for $250k, but for $2k...

Starship may not carry passengers b4 SpaceShipTwo, but that realization is a huge threat to SS2.
ABCD - Always Be Counting Down

Offline QuantumG

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Re: Virgin Galactic merger to make it publicly traded
« Reply #21 on: 07/10/2019 12:31 am »
I, for one, can't wait to see inside their books.

Human spaceflight is basically just LARPing now.

Offline Kabloona

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Re: Virgin Galactic merger to make it publicly traded
« Reply #22 on: 07/10/2019 12:34 am »
More detail on their revenue projections, but it further confuses the picture:

https://spacenews.com/virgin-galactic-projects-rapid-growth-and-profitability-after-going-public/

Quote
The company now expects to begin commercial service in the first or second quarter of 2020, performing 16 flights by the end of 2020 carrying 66 customers and producing $31 million in revenue from those customers and other sources.

Quote
In 2023, the company projects carrying out 270 flights carrying 1,565 customers, with five vehicles in service. That would produce $590 million in revenue. While the company expects a $104 million loss in 2020, it breaks even in 2021 and reaches $274 million in earnings on 2023.

There's something way off about those numbers. 1565 customers x $200k per ticket = $313m revenue, not $590m. That's almost a factor of 2 off.

The mystery phrase: "and other sources..."

which reminds me of the mathematics professor's comment on his proof, "and then a miracle occurs..."
« Last Edit: 07/10/2019 12:40 am by Kabloona »

Offline ncb1397

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Re: Virgin Galactic merger to make it publicly traded
« Reply #23 on: 07/10/2019 12:46 am »
If they are so close to real flights, why the hurry?  Wouldn't they get a much better valuation after passenger flight #1?
'

Because they're still not anywhere close to generating significant revenue and they need another massive cash infusion to get there?

Quote
Having reached these milestones, the Board of VG believes that the additional capital provided by the merger with SCH will provide the company with the support needed to reach commercialization.
They were saying that this current ship is practically ready..  Branson is itching to go, etc...

Why not make a flight, prove themselves, and THEN go public?

The timeline for the IPO seems to be by the end of the year....

Quote
British billionaire Richard Branson's Virgin Galactic plans a stock market listing by the end of the year, becoming the first space tourism firm to tap public markets for funding.
https://finance.yahoo.com/news/1-richard-bransons-virgin-galactic-103807857.html

Offline QuantumG

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Re: Virgin Galactic merger to make it publicly traded
« Reply #24 on: 07/10/2019 01:10 am »
Why not make a flight, prove themselves, and THEN go public?

The only answer I can see is that indeed they are not as close to flight as they hinted.

Or they just need a new billion  ;D
Human spaceflight is basically just LARPing now.

Offline meekGee

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Re: Virgin Galactic merger to make it publicly traded
« Reply #25 on: 07/10/2019 01:39 am »
If they are so close to real flights, why the hurry?  Wouldn't they get a much better valuation after passenger flight #1?
'

Because they're still not anywhere close to generating significant revenue and they need another massive cash infusion to get there?

Quote
Having reached these milestones, the Board of VG believes that the additional capital provided by the merger with SCH will provide the company with the support needed to reach commercialization.
They were saying that this current ship is practically ready..  Branson is itching to go, etc...

Why not make a flight, prove themselves, and THEN go public?

The timeline for the IPO seems to be by the end of the year....

Quote
British billionaire Richard Branson's Virgin Galactic plans a stock market listing by the end of the year, becoming the first space tourism firm to tap public markets for funding.
https://finance.yahoo.com/news/1-richard-bransons-virgin-galactic-103807857.html
So they need to fly tourists by the end of the year.  Maybe possible.

But five months is a long time, and time is not on their side here.  It sounds like an old song, but they need to hope Starship runs into issues.
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Offline Comga

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Re: Virgin Galactic merger to make it publicly traded
« Reply #26 on: 07/10/2019 04:36 am »
The SEC filings say 270 flights by 2023.

Fascinating table
Year             2020   2021   2022   2023
Vehicles            2        3        4        5
Flights              16     115    170    270
Seats               96     690   1020   1620
Passengers       66    646     965    1565
Ticket $M        $21   $195   $376   $562
$K/Ticket       $318    $302  $390   $359
Racks               30       44      55       55
Other $            $10    $15    $21     $28
$K/Rack         $333   $341  $382   $509
Revenue $M     $31   $210  $397   $590
           
Rocket $M         $5     $24     $36     $41
$k/Rocket      $313   $209   $212   $152
Flight Ops $M   $19     $30    $37     $50
Insurance $M     $3     $24    $40     $68
Total COGS      $27     $78   $113   $159
           
Profit                $4    $132   $284   $431
           
CapEx              $52    $59    $60     $54

Seats are calculated at 6 per flight.
The difference between seats and passengers is assumed to be a seat-equivalent experiment rack.

The price of tickets goes way up, then partway back down?
The price for a seat-equivalent rack goes way up in year 4?
The cost of rockets drops in year 2 and again in year 4, but not in year 3
They spend about $50M building a new SpaceShip every year, but their photo shows #2 and #3 just about parallel in construction currently.

It would be very surprising if these numbers had any bases.

The good part about this deal is the the new guy gets to say "flights next year" instead of Branson, who must be very tired of it by now.

What happened to the big investment by Aabar?
« Last Edit: 07/10/2019 04:49 am by Comga »
What kind of wastrels would dump a perfectly good booster in the ocean after just one use?

Offline Kabloona

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Re: Virgin Galactic merger to make it publicly traded
« Reply #27 on: 07/10/2019 09:02 am »
Re above table, SpaceNews article says they expect loss of $104m in 2020, break even in 2021, then $274m profit in 2022.

Aabar was bought out by Mubadala Investment Co in 2016 under a restructuring, so it's now Mubadala that owns the Aabar investment in VG.

The 2022 projected flight rate is basically one flight every weekday, with a vehicle turnaround time of about one week. With 5 vehicles, that's 5 flights per week.
« Last Edit: 07/10/2019 09:23 am by Kabloona »

Offline TrevorMonty

Re: Virgin Galactic merger to make it publicly traded
« Reply #28 on: 07/10/2019 09:17 am »
Branson and his financial backers finally arrived at exit plan, they will all be relieved to get their money back. It was starting to look like endless money pit and might yet be for new shareholders.

I'm expecting Blue to enter market with fleet of NS, they've had few years to build them. If NS seat price is considerably lower, Virgin will have to recalculate their financial projections.

Offline ncb1397

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Re: Virgin Galactic merger to make it publicly traded
« Reply #29 on: 07/10/2019 04:41 pm »
Quote
“Since we put two spaceships into space ... and made five new astronauts—the first astronauts to have been made on American soil since 2009—we’ve had 2,500 people ask to sign up,” Branson told CNBC. “The market is enormous.”
https://gizmodo.com/blasting-rich-people-into-space-is-better-business-than-1836220527

really?
« Last Edit: 07/10/2019 04:42 pm by ncb1397 »

Offline OSD237

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Re: Virgin Galactic merger to make it publicly traded
« Reply #30 on: 07/10/2019 06:26 pm »
What happened to the big investment by Aabar?

Historical press say Aabar have 37.8% - and had invested as of 2011 c.$390million in 2 tranches (the first $280million valuing  Virgin Galactic at c.US$900mln apparently).

I think that Aabar may have partially cashed out - albeit a split isn't provided. The 808mln injection of cash from SCH/IPOA appears to break down to fees of $48mln, $460mln cash to fund development/balance sheet and $300mln to enable redemptions of existing Virgin Galactic shareholders. As far as I can see in the presentation (sadly no prospectus that I can see), there is no mention of Aabar - only an image of them on the side of SS3 on slide 11. 

Per the most recent SEC filing (might also be from the Wall Street Journal) this line is interesting per SCH. "SPACs typically have two years to use capital they raise to buy a company and take it public. Social Capital Hedosophia has been trading on the New York Stock Exchange since September 2017 and is nearing the end of the time allotted to purchase a company."

Side Q - where did the other c.$600mln come from for the US$1bln invested to date? Did Virgin really put that in by themselves?  The company has no debt according to the presentation. If so credit to Branson and co for sticking with it for so long.

Finally these two slides were quite interesting.

Offline Kabloona

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Re: Virgin Galactic merger to make it publicly traded
« Reply #31 on: 07/19/2019 04:47 pm »
Interesting commentary on the latest deal.

https://spacenews.com/investors-dont-see-virgin-galactic-deal-as-model-for-space-industry/

Quote
The deal is a rare example of a major exit for an entrepreneurial space company. While there have been a number of smaller deals involving the merger and acquisition of space startups, there have been few large deals, like Google’s acquisition of Skybox Imaging, renamed Terra Bella, in 2014 for an estimated $500 million.

However, a panel of investors at the Space Frontier Foundation’s NewSpace 2019 conference here July 17 were doubtful the deal was a harbinger of either other large deals involving space startups, or the use of special purpose acquisition companies — which raise money on the public markets for the sole intent of acquiring another company — as an alternative to a more conventional initial public offering (IPO) of stock.

“From a financing perspective, you raise money when you can, how you can,” said Sunil Nagaraj, managing partner and founder of Ubiquity Ventures. “I think it’s great that they’ll have an injection of capital.”

However, the use of what he called a “reverse IPO” approach was not compelling to him. In addition, he called out the role played by the founder of SCH, venture capitalist Chamath Palihapitiya, who is investing $100 million of his money into Virgin Galactic and will serve as chairman of the company.

“The Chamath piece makes it completely one-off,” Nagaraj concluded, calling Palihapitiya a “failed venture capitalist” when his VC firm, Social Capital, decided to stop accepting outside capital, followed by the departures of most of its staff.

“I don’t view Chamath’s involvement or the reverse IPO structure as one that is particularly attractive to a lot of startups,” he said. “I don’t predict it will be repeated through his organization or through others very often.”

In other words, Branson et. al. were lucky to find a whale like Chamath to bail them out, to put it bluntly.
« Last Edit: 07/19/2019 04:50 pm by Kabloona »

Offline russianhalo117

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Re: Virgin Galactic merger to make it publicly traded
« Reply #32 on: 07/19/2019 05:36 pm »
Interesting commentary on the latest deal.

https://spacenews.com/investors-dont-see-virgin-galactic-deal-as-model-for-space-industry/

Quote
The deal is a rare example of a major exit for an entrepreneurial space company. While there have been a number of smaller deals involving the merger and acquisition of space startups, there have been few large deals, like Google’s acquisition of Skybox Imaging, renamed Terra Bella, in 2014 for an estimated $500 million.

However, a panel of investors at the Space Frontier Foundation’s NewSpace 2019 conference here July 17 were doubtful the deal was a harbinger of either other large deals involving space startups, or the use of special purpose acquisition companies — which raise money on the public markets for the sole intent of acquiring another company — as an alternative to a more conventional initial public offering (IPO) of stock.

“From a financing perspective, you raise money when you can, how you can,” said Sunil Nagaraj, managing partner and founder of Ubiquity Ventures. “I think it’s great that they’ll have an injection of capital.”

However, the use of what he called a “reverse IPO” approach was not compelling to him. In addition, he called out the role played by the founder of SCH, venture capitalist Chamath Palihapitiya, who is investing $100 million of his money into Virgin Galactic and will serve as chairman of the company.

“The Chamath piece makes it completely one-off,” Nagaraj concluded, calling Palihapitiya a “failed venture capitalist” when his VC firm, Social Capital, decided to stop accepting outside capital, followed by the departures of most of its staff.

“I don’t view Chamath’s involvement or the reverse IPO structure as one that is particularly attractive to a lot of startups,” he said. “I don’t predict it will be repeated through his organization or through others very often.”

In other words, Branson et. al. were lucky to find a whale like Chamath to bail them out, to put it bluntly.
I see the deal as a post buy up cash infusion of his new start up VirginTrains USA which is buying up rail start-ups and other companies as part of his pursuit of building an Advanced High Speed-to-Extreme High Speed pan American rail network in the countries he's granted a right to build. He recently stated that fixing the American passenger rail system is his top priority right now ranking it above some of his other companies.

Offline Kabloona

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Re: Virgin Galactic merger to make it publicly traded
« Reply #33 on: 07/19/2019 06:16 pm »

I see the deal as a post buy up cash infusion of his new start up VirginTrains USA which is buying up rail start-ups and other companies as part of his pursuit of building an Advanced High Speed-to-Extreme High Speed pan American rail network in the countries he's granted a right to build. He recently stated that fixing the American passenger rail system is his top priority right now ranking it above some of his other companies.

Thanks for pointing that out. I hadn't even heard of VirginTrains USA. More power to him if he can improve the state of rail transit here in the States, which is generally pretty awful.

Offline russianhalo117

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Re: Virgin Galactic merger to make it publicly traded
« Reply #34 on: 07/19/2019 06:29 pm »

I see the deal as a post buy up cash infusion of his new start up VirginTrains USA which is buying up rail start-ups and other companies as part of his pursuit of building an Advanced High Speed-to-Extreme High Speed pan American rail network in the countries he's granted a right to build. He recently stated that fixing the American passenger rail system is his top priority right now ranking it above some of his other companies.

Thanks for pointing that out. I hadn't even heard of VirginTrains USA. More power to him if he can improve the state of rail transit here in the States, which is generally pretty awful.
It was established in November 2018. VT USA is a placeholder name for planned VT Americas brand which would serve the entire Western Hemisphere. Link: https://www.virgin.com/richard-branson/introducing-virgin-trains-usa

Offline FutureSpaceTourist

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Re: Virgin Galactic merger to make it publicly traded
« Reply #35 on: 09/08/2019 11:00 pm »
Doug Messier has found new SEC submissions by VG with lots of info about the company:

Quote
A Closer Look at the Virgin Galactic-Social Capital Merger Deal
 September 8, 2019

http://www.parabolicarc.com/2019/09/08/closer-look-virgin-galactic-social-capital-merger-deal/

Go to https://sec.report/Document/0001193125-19-238293/ and scroll down for a large investor slide pack dated September 5th. A number of interesting details about revenue, flight ops etc picked out in Doug’s article above.

Edit to add: a selection of the slides from above SEC link
« Last Edit: 09/08/2019 11:09 pm by FutureSpaceTourist »

Offline FutureSpaceTourist

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Re: Virgin Galactic merger to make it publicly traded
« Reply #36 on: 09/24/2019 10:32 pm »
Quote
Richard Branson's Virgin Galactic plots move into 'flying cars'

[...]

Shareholder documents filed ahead of the company’s upcoming reverse listing, in which it will float shares on Wall Street via a merger with a Silicon Valley investment vehicle, reveal that the company is exploring “urban air mobility” as one potential use of its technology.

https://www.telegraph.co.uk/technology/2019/09/24/richard-bransons-virgin-galactic-plots-move-flying-cars/

Most of article is behind paywall. Not clear to me whether this is a serious exploration and an attempt to make the company more attractive to investors?

Offline FutureSpaceTourist

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Re: Virgin Galactic merger to make it publicly traded
« Reply #37 on: 10/08/2019 11:44 am »
Quote
Boeing taking $20 million stake in Virgin Galactic, with a vision of commercial hypersonic travel
PUBLISHED MOMENTS AGO
Michael Sheetz

KEY POINTS

Boeing’s venture arm HorizonX will take a $20 million minority stake in Sir Richard Branson’s space tourism company Virgin Galactic once it goes public later this year.

Virgin Galactic is planning to list on the New York Stock Exchange, through a merger announced in July with Social Capital Hedosophia.

The space tourism company is in “the final stretch” of testing, CEO George Whitesides told CNBC, adding that the company “still feels good about going into operation next year.”

https://www.cnbc.com/2019/10/08/boeing-20-million-stake-in-virgin-galactic-with-vision-of-hypersonic.html

Edit to add:

https://twitter.com/thesheetztweetz/status/1181536359011500033

Quote
"$20 million is a drop in the bucket for the $1 billion that they've raised," Boeing's Brian Schettler says

"It's really to catalyze a bigger partnership and align the companies to explore the future of high speed mobility and commercial access to space." cnb.cx/2nroGXY
« Last Edit: 10/08/2019 11:52 am by FutureSpaceTourist »

Offline FutureSpaceTourist

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Re: Virgin Galactic merger to make it publicly traded
« Reply #38 on: 10/08/2019 01:42 pm »
Quote
OCTOBER 8, 2019
Boeing To Invest In Human Spaceflight Pioneer Virgin Galactic

– Boeing and Virgin Galactic enter strategic partnership to transform commercial space travel and mobility

– Latest investment by Boeing HorizonX Ventures organization


Boeing will invest $20 million in Virgin Galactic, a vertically integrated human spaceflight company. The companies will work together to broaden commercial space access and transform global travel technologies.

“Boeing’s strategic investment facilitates our effort to drive the commercialization of space and broaden consumer access to safe, efficient, and environmentally responsible new forms of transportation,” said Brian Schettler, senior managing director of Boeing HorizonX Ventures. “Our work with Virgin Galactic and others will help unlock the future of space travel and high-speed mobility.”

To date, Virgin Galactic has invested more than $1 billion of capital to build reusable, human spaceflight systems designed to enable significantly more people to experience and utilize space. In July, the company announced its intent to become a publicly-listed entity via a business combination with Social Capital Hedosophia Holdings Corp. The Boeing investment will be in return for new shares in Virgin Galactic and is therefore contingent on the closing of that transaction, which is expected to close in the fourth quarter of 2019, and any such investment will be in the post-business combination company.

This investment brings together two companies with extensive experience in the space industry. Virgin Galactic is a pioneer of commercial human space flight and is the first and only company to have put humans into space in a vehicle built for commercial service, having built and flown a Mach 3 passenger vehicle. Through its manufacturing and development capabilities, Virgin Galactic can design, build, test, and operate a fleet of advanced aerospace vehicles. Boeing has unparalleled experience transporting people to orbit and building and operating large structures in that challenging environment. A part of every U.S. manned space program, Boeing serves as NASA’s prime private contractor for the International Space Station (“ISS”) and is preparing the new, reusable Starliner space capsule for launch to the ISS.

“This is the beginning of an important collaboration for the future of air and space travel, which are the natural next steps for our human spaceflight programme,” said Sir Richard Branson, founder of Virgin Galactic. “Virgin Galactic and Boeing share a vision of opening access to the world and space, to more people in safe and environmentally responsible ways.”

“The unique expertise of our companies stretches from points all around the world to the deepest reaches of space,” said Boeing Defense, Space & Security President and CEO Leanne Caret. “Together we will change how people travel on Earth, and among the stars, for generations to come.”

George Whitesides, CEO of Virgin Galactic, noted, “We are excited to partner with Boeing to develop something that can truly change how people move around the planet and connect with one another. As a Virgin company, our focus will be on a safe and unparalleled customer experience, with environmental responsibility to the fore.”

Additional information on specific projects to be pursued will be shared in the future.

###

https://www.virgingalactic.com/articles/boeing-to-invest-in-human-spaceflight-pioneer-virgin-galactic/

Offline FutureSpaceTourist

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Re: Virgin Galactic merger to make it publicly traded
« Reply #39 on: 10/24/2019 01:50 pm »
https://twitter.com/thesheetztweetz/status/1187355611987660801

Quote
Scoop! @virgingalactic is set to debut on the @NYSE under the ticker $SPCE on Monday.

This will make Virgin Galactic the first human spaceflight company to trade publicly.

twitter.com/thesheetztweetz/status/1187356439544774656

Quote
Shareholders on Wednesday approved the merger of @chamath's Social Capital Hedosophia with Virgin Galactic and it's expected to close tomorrow.

https://twitter.com/thesheetztweetz/status/1187362295183224832

Quote
Branson had hinted to me last week that Virgin Galactic's public debut was coming soon, saying "it's not long now" during the company's spacewear event with Under Armour. cnbc.com/2019/10/24/vir…

https://www.cnbc.com/2019/10/24/virgin-galactic-set-to-trade-on-the-nyse-on-monday-as-the-first-space-tourism-stock.html

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