Virgin Galactic stock crashes
Capitalism in space: For the first time since Virgin Galactic became a publicly-traded company two years ago, its stock on January 6th dropped below its initial offering price.
On Thursday, stock of the space tourism company fell to as low as $11.30 before rising back to $11.90 by the afternoon. When the company merged with a special purpose acquisition company to go public in 2019, its debut price was $11.75.
In the two years in-between, the price was pumped up to as high as $62, during which the company’s founder, Richard Branson, sold off about 80% of his stock, reducing his holdings from 51% of the company to only 11% and walking away with about $1.25 billion in cash.
Right now the company’s future is very much in question. It has delayed all of its commercial suborbital flights until late this year, if then. Meanwhile, Blue Origin is flying commercial suborbital tourist flights, and the orbital space tourism market is ramping up quite successfully. With no ability to enter that orbital market, Virgin Galactic appears to be at a dead end.
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In 2020 when the world panicked over COVID I wrote that the panic was unnecessary, that the virus was apparently simply a variation of the flu, that masks were not simply pointless but if worn incorrectly were a health threat, that the lockdowns were a disaster and did nothing to stop the spread of COVID. Only in the past year have some of our so-called experts in the health field have begun to recognize these facts.
Your help allows me to do this kind of intelligent analysis. I take no advertising or sponsors, so my reporting isn't influenced by donations by established space or drug companies. Instead, I rely entirely on donations and subscriptions from my readers, which gives me the freedom to write what I think, unencumbered by outside influences.
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Capitalism in space: For the first time since Virgin Galactic became a publicly-traded company two years ago, its stock on January 6th dropped below its initial offering price.
On Thursday, stock of the space tourism company fell to as low as $11.30 before rising back to $11.90 by the afternoon. When the company merged with a special purpose acquisition company to go public in 2019, its debut price was $11.75.
In the two years in-between, the price was pumped up to as high as $62, during which the company’s founder, Richard Branson, sold off about 80% of his stock, reducing his holdings from 51% of the company to only 11% and walking away with about $1.25 billion in cash.
Right now the company’s future is very much in question. It has delayed all of its commercial suborbital flights until late this year, if then. Meanwhile, Blue Origin is flying commercial suborbital tourist flights, and the orbital space tourism market is ramping up quite successfully. With no ability to enter that orbital market, Virgin Galactic appears to be at a dead end.
Readers!
Please consider supporting my work here at Behind the Black. Your support allows me the freedom and ability to analyze objectively the ongoing renaissance in space, as well as the cultural changes -- for good or ill -- that are happening across America. Fourteen years ago I wrote that SLS and Orion were a bad ideas, a waste of money, would be years behind schedule, and better replaced by commercial private enterprise. Only now does it appear that Washington might finally recognize this reality.
In 2020 when the world panicked over COVID I wrote that the panic was unnecessary, that the virus was apparently simply a variation of the flu, that masks were not simply pointless but if worn incorrectly were a health threat, that the lockdowns were a disaster and did nothing to stop the spread of COVID. Only in the past year have some of our so-called experts in the health field have begun to recognize these facts.
Your help allows me to do this kind of intelligent analysis. I take no advertising or sponsors, so my reporting isn't influenced by donations by established space or drug companies. Instead, I rely entirely on donations and subscriptions from my readers, which gives me the freedom to write what I think, unencumbered by outside influences.
You can support me either by giving a one-time contribution or a regular subscription. There are four ways of doing so:
1. Zelle: This is the only internet method that charges no fees. All you have to do is use the Zelle link at your internet bank and give my name and email address (zimmerman at nasw dot org). What you donate is what I get.
2. Patreon: Go to my website there and pick one of five monthly subscription amounts, or by making a one-time donation.
3. A Paypal Donation or subscription:
4. Donate by check, payable to Robert Zimmerman and mailed to
Behind The Black
c/o Robert Zimmerman
P.O.Box 1262
Cortaro, AZ 85652
You can also support me by buying one of my books, as noted in the boxes interspersed throughout the webpage or shown in the menu above.
Branson can use some of those billions to wipe away the tears which I’m sure are streaming down his cheeks.
What is sad is how quickly Rutan has been forgotten…Rocky Mountain low.
I am surprised the V.G. stock has not gone any lower.
If you read the last part of the article, you will see Blue Origin’s stock has gone down 75% to only $7 a share, down from $57. I did not realize it tumbled that much.
Jay: Blue Origin is not a publicly traded company on the market. The mention of their stock in the posted article is an error.
No, You Can’t Buy Blue Origin Stock. 3 Space Stocks to Watch Instead.
https://investorplace.com/2021/10/no-you-cant-buy-blue-origin-stock-3-space-stocks-to-watch-instead/
Rex,
Thank you for the correction. If Blue Origin had stock, it would have made bigger news with the delay of the BE-4.
I am invested in stocks myself and therefore deal with these topics out of self-interest.
What amazes me is how quickly companies (can) become public stock corporations today and without actually being able to demonstrate a business model that has been tried and tested over many years and that includes good profits.
Sure, anyone who buys such stocks should be aware of the risk (which includes total loss). You consciously buy risky stocks, but then the possible profit should also be in a healthy proportion to the risk of loss. But that is not the case here, because even if the business model of private space travel works, in my opinion, the growth of such companies cannot be “arbitrarily” large. The market is limited and will be exhausted after a period of 10 years or so.
Nassim Taleb:
“How Things Gain from Disorder”
(Stanford, 2013)
https://youtu.be/B2-QCv-hChY
52:46
After you’ve done it one time wouldn’t you have to drop the “Virgin” part? That’s the extent of my GAS ability with those low flying “space” clowns!