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Why Are Virgin Galactic Shares Rising Today? 08/06/21

Shares in the world’s foremost space tourism company are rising pre-market after it announced details of its next sale and test flight.

Just weeks after its billionaire backer, Richard Branson, reached the edge of space in its VSS Unity aircraft, Virgin Galactic (NYSE: SPCE) reported another quarter of losses — though this was to be expected. 

So, how did Virgin Galactic perform in Q2?

Virgin Galactic’s second quarter in numbers

It wasn’t the worst quarter in the company’s short history, though obviously, it is still a long way from producing tangible revenue. So, here are the highlights:

  • An adjusted EBITDA loss of $56 million, just above the loss of $54 million in the prior quarter.
  • It generated $571,000 of revenue from a scientific research mission to space in May.
  • It maintains cash and cash equivalents of $552 million as of June 30, 2021.
  • Virgin Galactic generated $500 million in gross proceeds through the sale of approximately 13.7 million shares of common stock during the quarter. 

What’s next for Virgin Galactic?

There were several more highlights for the space tourism company announced on the call. 

Firstly, following two successful test flights in Q2, the company revealed plans for two more tests with the VSS Unity this year. One will fly members of the Italian Air Force, while the other will be carrying another four “mission specialists”. 

Secondly, the company is finally opening back up ticket sales for tourists who wish to embark on recreational flights when it finally launches. With a reported 600 customers already signed up at $200,000 per head, before sales were closed years ago, the price has since risen to $450,000, with tickets available immediately. From its official report:

For the private astronaut market, the Company will have three consumer offerings: i) a single seat; ii) a multi-seat couples / friends / family package; and iii) full-flight buy out. Pricing for these offers will begin at $450,000 per seat. Sales will initially open to the Company’s significant list of early hand-raisers, prioritizing the Spacefarer Community, who, as promised, will be given first opportunity to reserve their place in space. A follow-on priority list will be opened to customers interested in reserving future spaceflights.

So, should I invest in Virgin Galactic? 

Virgin Galactic remains an incredibly risky investment as it is operating in completely unprecedented territory: space. This ‘final frontier’ is untapped though, also representing a great opportunity for first movers. It is still very early days for the business, which doesn’t even have viable commercial revenue yet, but time will tell if the risk can pay off once it officially begins launching tours into space, hopefully, sometime next year. 

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MyWallSt operates a full disclosure policy. MyWallSt staff currently holds long positions in companies mentioned above. Read our full disclosure policy here.