Is Virgin Stock A Buy?

Richard Branson Goes Back To The Space SPAC Game With Virgin Orbit

Just weeks after blasting off for the first time, Richard Branson is launching another space company via a SPAC.

Just weeks after completing his first successful flight to space (or very close to space anyway), Richard Branson is going back to the SPAC markets again with another space company — Virgin Orbit.

Virgin has two space companies?

Both companies might deal with the great unknown, but whereas Virgin Galactic (NYSE: SPCE) is focused on flying tourists into space, Virgin Orbit’s payload is satellites. 

Orbit was actually spun-off from Virgin Galactic in 2017 and is now set to go to market by merging with the special purpose acquisition company (SPAC) NextGen Acquisition Corp. II. The deal should raise over $480 million for the company and value it at around $3.7 billion — a little more than half that of Virgin Galactic.

After enjoying the market’s attention last year, SPACs have been having a hard time of it lately. A few high-profile flops within the market like Lordstown Motors and Nikola have raised questions over the quality of companies that go public through this method, especially considering that they often get to sidestep a lot of the regulation involved in a traditional public listing.

However, Virgin Orbit is a very interesting company — perhaps even more so than its big brother. While many questions have been raised over the long term feasibility of Galactic’s market of space tourism, space haulage, on the other hand, looks set to be one of the biggest industries of the future. Orbit says it already has about $300 million in active contracts and expects to make $15 million in revenue this year. By 2026, the company expects that number to jump to $2.1 billion.

Is Virgin Galactic Stock A Buy?

Virgin Galactic, on the other hand, made virtually nothing last year. 

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