Virgin Galactic Stock Is Soaring Because Branson Wants to Win the Space Race With Amazon’s Bezos
Virgin Galactic’s Richard Branson wants to beat Amazon’s Jeff Bezos into space.
Courtesy Virgin Galactic
Stock in space tourism pioneer Virgin Galactic is on the move again because a battle between billionaires is heating up. And this is a battle people can watch.
Galactic (ticker: SPCE) shares are soaring, up 30% in premarket trading to about $55. The company announced its next test flight, which will be fully crewed and carry founder and billionaire Sir Richard Branson into space.
The flight is slated to leave as soon as July 11. That’s significant because it’s earlier than another billionaire, Jeff Bezos, plans to go leave the earth. Bezos is taking his brother and the winner bidder in an auction into orbit in a Blue Origin rocket on July 20. Blue Origin is the space company Bezos founded.
The third person paid $28 million for the right to be first.
Space aficionados, as well as investors, can watch the Branson flight on Virgin Galactic.com and the company’s Twitter, YouTube, and Facebook channels. The live stream is expected to begin at 9 a.m. eastern time on the day of the flight.
Virgin Galactic investors might already feel like they have been on a rocket after the recent performance of their investment. Shares traded below $15 in early May after the company ran into more flight testing delays. But a resolution of testing delays and another test flight, which led to the company receiving its commercial license allowing it to carry passengers, sent shares to almost $56 by late June.
That’s not all the recent trading volatility. The stock has traded down every day this week after a couple of analysts downgraded shares after prices blew past their price targets. Now shares are up again on the Branson news.
Coming into Friday trading, Galactic stock is up about 82% year to date, far better than comparable returns of the S&P 500 and Dow Jones Industrial Average. Investors are high on the prospects for space tourism.
Including premarket gains, the company’s market capitalization is roughly $13 billion, about the same as Vail Resorts (MTN).
Vail and Galactic have very different growth profiles. Vail Resorts, though is expected to generate $1.9 billion in 2021 sales growing to $2.6 billion in 2022. Galactic, for comparison, is expected to generate about $3 million in 2021 sales, growing to $53 million in 2022.
Vail trades for about 41 times estimated 2022 earnings. Galactic isn’t expected to be profitable in 2022.
Which will it be: Head for the slopes…or head for the stars?
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