What’s going on?
Virgin Galactic completed its next major test flight over the weekend, as the space tourism company doubles down on its battle for the stratosphere.
What does this mean?
The mission was the spacecraft’s twenty-second test flight, but its first with a full crew. It also marked the first time a company founder has traveled on their own ship, with Richard Branson beating Amazon’s Jeff Bezos – who has his own midlife crisis-fueled space venture – by eight days.
Both companies are trying to build businesses catering to fatcats who’ll pay top dollar for an unforgettable view of our planet. And those fatcats seem to be here for it: more than 600 of them have paid an average of $130,000 each for the chance to fly with Virgin Galactic, while another thousand have saved their spots with a $1,000 deposit (tweet this).
Why should I care?
For markets: Virgin Galactic flies too close to the sun.
Virgin Galactic’s shares – which doubled in the lead-up to the weekend’s test flight – were up by as much as 10% before the market opened on Monday. The company was quick to capitalize on the jump, announcing that it’d be selling $500 million worth of new shares to help fund its transition from test flights to full-blown commercial operations. But what goes up must come down, and with so many new shares on the market set to dilute the value of existing ones, investors sent its stock back down more than 10%.
Zooming in: Get ready for liftoff.
Virgin Galactic said on Monday that it was planning to eventually have around 400 flights a year carrying six passengers each, which could – according to investment research firm Alliance Bernstein – end up costing between $400,000 and $500,000 a ticket. That implies up to $1.2 billion of annual sales once the firm’s operations are fully up and running, which would be – sigh – out of this world.