Richard Branson’s Space Unit to Go Public
Virgin Galactic would be first listed company with plans to put tourists into space
By Maureen Farrell
The Wall Street Journal
Updated July 9, 2019 11:02 am ET
Mr. Branson’s space-tourism venture is preparing to become a publicly traded company. Photo: Gene Blevins/Zuma Press
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Virgin Galactic, Richard Branson’s space-tourism venture, is preparing for liftoff as a publicly traded company.
Social Capital Hedosophia Holdings Corp. IPOA +2.01% , a special-purpose acquisition company, or SPAC, is planning to invest roughly $800 million in Virgin Galactic for a 49% stake.
As part of the deal with Social Capital Hedosophia, a publicly traded shell, Virgin Galactic later this year would become the first publicly listed human-spaceflight company.
Virgin Galactic expects that this deal will give it enough capital to fund the business until its spaceships can commercially operate and turn a profit. It is in a race with companies including Jeff Bezos’ Blue Origin and Elon Musk’s Space Exploration Technologies Corp., or SpaceX, which are also working on ways to send tourists into space.
Virgin Galactic rocket plane, the WhiteKnightTwo carrier airplane, with SpaceShipTwo passenger craft takes off in Mojave, Calif. Photo: gene blevins/Reuters
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Mr. Branson said in an interview that most of the proceeds from this deal will be used “to make sure we can enable as many people in the world as possible to become astronauts.”
The listing plans were reported earlier by The Wall Street Journal and announced by the companies on Tuesday morning.
Virgin Galactic years ago led the way in sparking interest in blasting tourists and small satellites into space using cheap rockets and various other unconventional launch systems. Experts consider it the fastest-growing segment in commercial space. But a December 2014 fatal accident set back the company’s plans.
Still, it has gotten some 600 people to plunk down roughly $80 million in total to secure seats on vehicles it hopes will put the first customers into space in the next few years.
Virgin Galactic has already raised more than $1 billion since it was founded in 2004, mostly from Mr. Branson.
Saudi Arabia’s Public Investment Fund announced plans to invest $1 billion in the company in 2017, but Mr. Branson suspended those talks a year later after the murder of Jamal Khashoggi, a dissident writer, at a Saudi consulate.
Chamath Palihapitiya, founder and chief executive officer of Social Capital LP. Photo: Mark Kauzlarich/Bloomberg News
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After Mr. Branson stepped away from the deal, Chamath Palihapitiya, chief executive of venture-capital firm Social Capital LP and a former Facebook Inc. executive, contacted him about a potential investment through the SPAC he launched in 2017. The parties have spent most of this year working through the details and Virgin Galactic’s executives recently met with investors to gauge their interest.
The $800 million includes about $100 million that Mr. Palihapitiya is putting into the deal. He will serve as chairman of the company.
“There’s nothing as exciting as this next-generation space race,” said Mr. Palihapitiya. “It’s attracting the most talented and respected entrepreneurs of our generation.”
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.
SPACs are being formed at a record pace amid a booming IPO market and robust interest from private-equity firms and others.
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