Tag: Richard Branson

Branson selling 25% of Virgin Galactic shares to save airline business

9:19 am

Capitalism in space:It appears that Richard Branson is selling about 25% of shares in Virgin Galactic in order to prop up his airline and travel businesses that have been crushed by the Wuhan flu panic.

Branson’s Virgin Group may sell as many as 25 million shares in the space-travel firm, with the proceeds going to his leisure and travel businesses, according to a statement on Monday. The 69-year-old Briton is trying to save Virgin Atlantic, which has struggled to qualify for a UK-supported loan program aimed at helping businesses survive the worldwide coronavirus pandemic. He’s seeking outside investors for the airline, while also weighing an infusion of his own funds.

The irony here is that Virgin Galactic has been a big financial money sink since its inception in the mid-2000s, having never flown a single customer in its fifteen-plus year existence. However, Branson has bamboozled a lot of people into buying its stock in the past year, since it went public, causing the stock to rise from its initial price of about $12 to about $18 to $20. This sell-off gives Branson an almost 100% profit on the stock, a good deal indeed for him, even if the company never makes a dime.

He says he is pumping the money back into his other businesses, but we shall see.

What the sale means however is that Branson no longer has a majority share in Virgin Galactic. The biggest shareholder is now Social Capital Hedosophia, created by venture capitalist Chamath Palihapitiya.

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Virgin Galactic stock drops 25% since IPO on Monday

9:14 am

Capitalism in space: While this article focuses more on jabs taken by the head of British Airways against Richard Branson and Virgin Galactic, it contains one tidbit of real note:

Shares in Virgin Galactic have fallen by more than a quarter since it went public at the start of the week, wiping more than $600m (£464m) off its value.

On Monday, the initial offering price for stock in Virgin Galactic was $12.93. At the moment it is trading in the mid-$9 dollar range, with the low earlier today of $9.09. Overall the stock lost about 25% of its value in a week, indicating properly that its value had been inflated by Branson and his partners in that initial offering.

But then, inflating the value of Virgin Galactic has been Richard Branson’s mode of operation since 2004 when he founded the company. I continue to wish the company success, but have become exceedingly skeptical about it.

And to change my mind the company is going to have to finally actually accomplish something, rather than make empty promises that never come true.

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Branson sells 49% of Virgin Galactic, stock to be publicly listed

8:24 am

Capitalism in space: Richard Branson has sold 49% of Virgin Galactic in a deal that will have the company’s stock publicly listed by the end of 2019.

The firm will list its shares as part of a merger deal with Social Capital Hedosophia, a special-purpose acquisition company (SPAC) created by venture capitalist Chamath Palihapitiya. Social Capital Hedosophia, formed by Palihapitiya’s Social Capital and venture capital firm Hedosophia in 2017, will invest $800 million for a 49% stake in the combined company. The firm will have an enterprise value of $1.5 billion, Virgin Galactic said.

…Branson’s space venture would be the first publicly-listed human spaceflight firm, with the stock market listing slated to take place in the second half of 2019.

Branson had been in talks with Palihapitiya since he suspended talks over a Saudi investment in his space companies last year. Riyadh had planned to invest a total of $1 billion into Virgin Galactic and Virgin Orbit, which focuses on small satellites, but the deal fell through over the murder of journalist Jamal Khashoggi.

Branson was the person who said the Saudis backed out because of Khashoggi, but I personally do not believe that story. What I think happened was that, after 15 years of empty promises and no tourist flights, the Saudis suddenly realized that Virgin Galactic was a bad investment, and backed out. Branson now needs cash to keep the company afloat.

I am honestly unfamiliar with the ways of Wall Street. I do not know whether being “publicly listed” means the stock will be available for trade. If so, I expect the stock value to quickly plunge.

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Virgin Galactic to move flight operations to New Mexico

8:38 am

Capitalism in space: As promised more than a decade ago, Virgin Galactic yesterday announced that is finally going to move its SpaceShipTwo flight operations from Mohave to the Spaceport America facility in New Mexico this summer.

This fulfills Virgin’s original agreement with New Mexico, where the company agreed to base its commercial operations there if the state spent money to build the spaceport. The move is beginning now, but will mostly occur in the summer. It suggests the company might finally be getting ready to at last begin commercial tourist flights, only a decade-plus later than originally promised.

As is usual, Richard Branson made this a big public relations event. And as is usual, numerous press outlets have swooned over it. I remain very skeptical.

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Branson seeks new capital for Virgin Galactic/Orbit

8:31 am

Capitalism in space: Apparently short of cash because of his cancellation of a $1 billion investment space deal with Saudi Arabia, Richard Branson has hired a finance firm to find him new capital for his two space companies Virgin Galactic and Virgin Orbit.

Sources said this weekend that Sir Richard was seeking funding that would value Virgin Galactic and Virgin Orbit, which launches satellites for commercial customers, at a combined sum of well over $2bn (£1.55bn).

The precise amount that he is looking to raise has yet to be determined, but people close to the process suggested it would be at least $250m (£193m), representing a minority stake.

The structure of a deal could see new shareholders injecting money into either, or both, Virgin-branded space companies.

I will not be surprised if Branson gets the investment capital for Virgin Orbit. I will also not be surprised if he has trouble finding anyone willing to invest a lot in Virgin Galactic. In fact, this shortage in capital might spell the end of this fourteen year effort at building a reusable spacecraft designed to provide suborbital tourism.

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Virgin Galactic lays off 40 workers

3:39 pm

Capitalism in space: Virgin Galactic earlier in January laid off 40 workers, saying it was in preparation for moving their launch operations to New Mexico where they will be doing their commercial flights.

This is about 5% of their payroll, so at first glance it does not appear to be a significant number. Yet, if they were about to move to commercial operations I would think their payroll would grow, not shrink.

The article itself buys into the company’s tediously overworn sales pitch (that they have been pushing for more than a decade) that they are about to start commercial operations, flying paying tourists, but this is just not credible. For example, as part of this sales pitch they made a big deal about hiring Under Armour to make the flight suits for their flights. Yet, no designs have been released, even though Virgin Galactic has been working on doing commercial tourist flights for more than fourteen years. Only now they realize they need flight suits?

In 2017 I predicted that Virgin Orbit would fly a commercial flight before Virgin Galactic, even though Orbit only started to seriously build its rocket in 2015, about a dozen years after Galactic got started. I stand by that prediction, which I expect will prove true this year.

At the time I also predicted that Virgin Galactic’s Unity spaceship will never make orbital space, defined by practically everyone since around 1970 to be 67 miles elevation, or 100 kilometers. I also stand by that prediction, because only just before Unity’s flight to barely 50 miles did the issue of the definition of space reappear after almost a half century. Virgin Galactic has been pushing to get the definition changed because their spacecraft probably cannot get to 67 miles.

I just wish reporters would stop buying into Branson’s sales pitch. Show some skepticism, damn it. Your job isn’t to be a public relations agent for him.

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Branson suspends negotiations with Saudi Arabia

9:28 am

Virgin Group chairman Richard Branson today announced that he is suspending negotiations with Saudi Arabia’s investment funds because of their involvement in the disappearance and possible murder of a journalist in the Saudi consulate in Turkey.

“What has reportedly happened in Turkey around the disappearance of journalist Jamal Khashoggi, if proved true, would clearly change the ability of any of us in the West to do business with the Saudi government,” Branson said in a statement.

It was expected that Saudi Arabia was going to invest about a billion dollars in Branson’s space companies, Virgin Galactic and Virgin Orbit.

Branson has also suspended his directorship in two Saudi tourism projects.

I must wonder if what really has happened is that the Saudi’s were becoming reluctant to commit funds to Branson because of the lack of success at Virgin Galactic, and Branson is therefore providing himself cover for the failure of the negotiations by claiming it was he that pulled out, for different reasons.

At the same time, what happened to Khashoggi might justify Branson’s actions.

He had an appointment at the Saudi consulate in Istanbul to collect some documents he needed to marry his Turkish fiancee — a certificate showing that he was divorced from his first wife. He entered the consulate on Oct. 2 at 1:14 p.m., asking his fiancee to wait outside for him. She did. Until 2 a.m. He never emerged.

A number of news outlets, citing Turkish sources, are reporting that Jamal Khashoggi, the former editor of a Saudi newspaper, regime critic and Washington Post contributor, was murdered. The New York Times quoted sources who said that 15 Saudi agents from the security services, including one autopsy expert, entered Turkey that same day on two chartered flights. They departed that evening. The Saudis claim that Khashoggi left the consulate an hour after he arrived and have no idea what became of him. The Turks would like to send a forensic team inside, but the Saudis have refused.

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Suborbital promises

7:49 am

Capitalism in space: Two stories today highlight the contrasts that presently exist within the still unborn suborbital tourist industry:

In the first, Richard Branson made another one of his bold predictions, the same kind of prediction he has been making about Virgin Galactic now for almost a decade. Again and again he claims, based on nothing, that his spaceship will be carrying people into orbit in mere months. It never happens. It won’t happen here.

In the second, Jeff Bezos announces that he hopes to fly people on his New Shepard suborbital spacecraft by 2018, but at the same time he also announces that the program is delayed.

Bezos, speaking in front of the company’s exhibit at the 33rd Space Symposium here that features the New Shepard propulsion module that flew five suborbital spaceflights in 2015 and 2016, backed away from earlier statements that called for flying people on test flights later this year. “We’re going to go through the test program, and we’ll put humans on it when we’re happy,” he said. “I don’t think it’s going to be 2017 at this point. It could be.”

Bezos has been very careful, from the beginning, to make no bold or specific predictions about when his spacecraft will fly manned. Here, he is once again making it clear that any previously announced schedules were very tentative, and should not be taken too seriously.

Which person would you trust with your life on a suborbital flight?

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Richard Branson makes another prediction!

7:49 am

Promises, promises! Richard Branson today predicted that Virgin Galactic’s second SpaceShipTwo suborbital spaceplane will begin flight tests in February 2016.

Forgive me if I am extremely skeptical. Branson has been making these kinds of promises now for more than a decade, none of which has come even close to coming true. I note this new prediction here merely to point out how bad his past predictions have been. Nowadays, I only believe Virgin Galactic is going to fly after they have do so.

Posted from Tucson International Airport, on the way to Mexico City for a week of sightseeing.

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Another delay at Virgin Galactic

2:21 pm

In an interview with David Letterman this week, Richard Branson admitted that his first flight on SpaceShipTwo will not be in December 2014 but early next year.

Watch the interview at the link. It is very clear that Branson is getting uncomfortable with the situation. He has made these claims too many times without showing any results. Also note the incredible ignorance exhibited by Letterman. A good interviewer has to ask some basic questions, but a good interviewer also needs to have a basic understanding of the subject. Letterman shows us here that he doesn’t know squat.

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Ground tests of SpaceShipTwo’s engines continue.

9:20 am

Ground tests of SpaceShipTwo’s engines continue.

No flight tests have occurred in four months, however, which suggests that they have decided to abandon their first engine design and are now doing these new ground tests to prove the reliability of the new engine before proceeding to flight tests. The lack of flight tests also suggests that Richard Branson’s most recent announcement that he will definitely fly as a passenger this year is most likely hogwash.

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Richard Branson today claimed that Virgin Galactic will fly its first space tourists this year.

1:50 am

Did you ever get the feeling of deja-vu? On Monday Richard Branson claimed that Virgin Galactic will fly its first space tourists this year.

I am all for his success, but I must admit I am becoming skeptical. Branson said exactly the same thing in May 2013, except then he was claiming that the first tourist flight would occur before the end of 2013. It didn’t happen.

There are too many rumors about the engine troubles with SpaceShipTwo to allow me to accept Branson’s claims any longer at face value.

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In an interview Richard Branson says that Virgin Galactic is working to replace SpaceShipTwo’s hybrid engine.

8:46 am

In an interview Richard Branson says that Virgin Galactic is working to replace SpaceShipTwo’s hybrid engine.

So for instance, the initial rocket which I’ll be flying on to space will be thrown away afterward. Within six to nine months, we will be using rockets that will have capability of being used maybe up to 1,000 times, but definitely up to 100 times. That will bring the cost of space travel down dramatically.

This timing fits with their new schedule for the first commercial flights of SpaceShipTwo sometime late in 2014. I suspect they are hoping to fly the ship a few more times with the troublesome hybrid engine, partly for engineering research and partly to keep interest up in the company, and then switch over to a new engine.

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In a newspaper interview Richard Branson today claimed that Virgin Galactic is “just three months away from having a fully-functioning rocket that is capable of taking passengers into orbit.”

5:46 am

In a newspaper interview Richard Branson today claimed that Virgin Galactic is “just three months away from having a fully-functioning rocket that is capable of taking passengers into orbit.”

At this moment I am sadly very skeptical. The company has only done two powered flights of SpaceShipTwo, and the highest it has gone is about 70,000 feet. To make it fully-functioning, they need to fly it 70 miles high. And the rumors about their engine problems suggest they won’t be able to do this until next year, at the soonest.

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In a web interview today, Richard Branson said that the first supersonic powered flight of SpaceShipTwo is now set for this coming Monday.

2:49 pm

The competition heats up: In a web interview today, Richard Branson said that the first supersonic powered flight of SpaceShipTwo is now set for this coming Monday.

We’re hoping to break the sound barrier. That’s planned Monday. It will be a historic day. This is going to be Virgin Galactic’s year. We’ll break the sound barrier Monday and from there, we build up through the rest of the year, finally going into space near the end of the year. I’ll be on the first official flight, which we look to have in the first quarter of next year. We’re doing a number of test flights into space first.

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Richard Branson talks to the Wall Street Journal

9:23 am

Richard Branson talks to the Wall Street Journal about space.

Mr. Branson is still radiating enthusiasm. “We’ve got just short of 500 people now signed up to go, which is actually more people than have been up to space in the history of space travel, and we hope to put those up in our first year of operation,” he says, predicting the first commercial flight by “about next Christmas,” although he acknowledges that there have been many delays.

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How Richard Branson started Virgin Atlantic

7:35 pm

How Richard Branson started Virgin Atlantic.

“In ’79, when Joan, my fiancee and I were on a holiday in the British Virgin Islands, we were trying to catch a flight to Puerto Rico; but the local Puerto Rican scheduled flight was cancelled. The airport terminal was full of stranded passengers. I made a few calls to charter companies and agreed to charter a plane for $2000 to Puerto Rico. Cheekily leaving out Joan’s and my name, I divided the price by the remaining number of passengers, borrowed a blackboard and wrote: VIRGIN AIRWAYS: $39 for a single flight to Puerto Rico. I walked around the airport terminal and soon filled every seat on the charter plane.

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