Virgin Galactic: Will the Company Rebound in 2022?22nd Mar 2022
Virgin Galactic (founded by Richard Branson) is a business that investors have considered a risky venture from the start. Space tourism can either take off spectacularly or fail before making any money, and the delays in Virgin Galactic’s operations make it look like the company will most likely fail. The entire space fleet is still grounded, while Chamath Palihapitiya, the Board of Directors Chairman of the company, has recently resigned. At the same time, it’s still possible that Richard Branson with his associates will manage to overcome the difficulties and turn their space tourism business into a profitable long-term investment.
Here’s Why Virgin Galactic Can Turn Its Luck Around
Virgin Galactic’s plans for this year are ambitious and include getting their first 1,000 passengers signed up for space flight. Unfortunately, that doesn’t mean Richard Branson and the team will be sending anyone to space any time soon. The company would merely start collecting committed deposits. Virgin Galactic hopes to receive $150 million in 2022, as booking a seat for a space flight experience costs $150,000.
However, operations around space tourism are also expensive for the company. They’re burning almost $60 million every three months. Luckily, Richard Branson and his business partners have succeeded in amassing over $1 billion in cash for the company, which should get them to first flights.
The risks remain, so does the potential
The total value of Virgin Galactic’s stock is around $2.1 billion. Plus, the recent debt offering puts over $1 billion to the balance sheet. Furthermore, every time Richard Branson manages to convince clients to pay approximately half a million for the space tourism adventure, the company will make almost $2 million per flight. So, although investing in this space tourism business remains risky, if Richard Branson succeeds in kick-starting Virgin Galactic’s commercial operations, it can also become profitable.