Correction: An earlier version of this story incorrectly identified the number of seats on the Ansari X Prize winning space plane.
Virgin Galactic began trading on the New York Stock exchange Monday — another sign that entrepreneur-built space companies are maturing.
The startup is trading under the ticker “SPCE,” replacing the IPOA moniker that Galactic’s merger partner, Social Capital Hedosophia, has traded under since 2017.
Bold blue banners decorated the NYSE building in downtown Manhattan on Monday to announce Galactic’s arrival.
Shares of IPOA climbed 11% on Friday after shareholders formally approved the merger deal last week. After climbing more than 5% in the first minutes SPCE started trading Monday morning, the stock ended the day flat at about $11.50 per share. IPOA began trading in 2017 for $10.
Venture capitalist Chamath Palihapitiya created Hedosophia as a “blank check” investing tool that pooled money while its handlers searched for a takeover target. When Galactic and Hedosophia announced their merger in July, the companies’ combined value was said to be roughly $1.5 billion. Palihapitiya also personally invested $100 million of his own money in Galactic.
Branson started Virgin Galactic in 2004 after watching a privately funded three-seater space plane rocket into the upper atmosphere to win the Ansari X Prize.
His firm bought that technology and has worked for the past 15 years to create a larger rocket-powered plane capable of hauling up to six paying customers on brief flights to the edge of space.
The company says it will be ready to start commercial operations next year.
Galactic CEO George Whitesides called the company’s debut on the NYSE the “start of a new era for the human spaceflight industry.”
In a statement, Whitesides said, “Now that VG is a publicly traded company, anyone can invest in a human spaceflight company that is striving to truly transform the market and be part of the excitement of the commercial space industry.”
Some analysts have questioned just how big the demand is for commercial space tourism, and whether enough of the world’s ultra-wealthy will be drawn to the business in order to make it financially sustainable. Galactic has charged its current book of about 600 customers $200,000 to $250,000 apiece for rides into space.
But Galactic says there’s enough interest to support one or more tourism businesses, and there’s a long list of people who have shown interest in buying tickets next time they go on sale.
New Space investing
Galactic is the first big name in the burgeoning space startup industry to make the leap into the public markets. Entrepreneurs have created rocket and satellite upstarts for years, but only recently have commercial businesses made significant headway in an industry that’s notorious for high upfront costs and big risks.
The biggest name in the arena, Elon Musk’s SpaceX, launches rockets and spacecraft for NASA, the US military and commercial satellite companies. But Musk has said he will avoid taking SpaceX public until the company has achieved some of the riskier milestones he has laid out — including building a rocket capable of establishing a human settlement on Mars.
Blue Origin, which is gearing up to compete directly with Galactic in the suborbital space tourism market, is funded directly by Amazon (AMZN) billionaire Jeff Bezos. He’s said he sells about $1 billion or more worth of Amazon (AMZN) stock each year to keep his company flush with cash. Bezos has not discussed plans to take Blue Origin public.
Hoards of other space startups — pursuing everything from rockets to satellite software — are playing the venture capital game.
Wall Street is predicting a major boom in the broader space sector. Top financial institutions, from Goldman Sachs to Morgan Stanley, forecast that it will grow from about $340 billion to $1 trillion or more over the next two decades.