On October 29th, according to foreign media reports, space travel company Virgin Galactic is now a publiccompany through a merger with Special Purpose Acquisitions firm Social Capital Hedosophia Holdings. On Monday morning, virgin Galactic founder Richard Branson visited the New York Stock Exchange to celebrate the company’s listing.
Virgin Galactic opened the day at $12.34, but ended the day down 0.3 percent at $11.75.
The question now is whether public investors will put money into a company focused on sending tourists into space and experiencing a few minutes of weightlessness. Virgin Galactic’s first vehicle is a space shuttle called VSS Unity, which can carry a small number of passengers to the edge of space before landing on the Earth’s runway. So far, Virgin Galactic has completed only two LAUNCHEs of the VSS Unity spacecraft, carrying a total of five passengers. Virgin Galactic plans to start commercial operations in mid-2020, when Branson will be in space for the first time.
On the day of the listing, Branson and Virgin Galactic chief executive George Whitesides gave a technology interview about the impact of the listing and how it would help the company do business.
Media: I’d like to know what you think about trading on the first day of listing.
Branson: I was watching the plate when you were talking. I think we’ve had a very happy two days. It’s up 11 percent on Friday and 5 or 6 percent today. Anyway, it looks good.
Media: After all, the company is still in the product development phase, and plans to launch the first commercial products until the middle of next year. So how much hope will Virgin Galactic’s launch give you?
Branson: Virgin Galactic raises $500 million… With the money, the company will help attract more talent, develop more spacecraft, and complete the construction of another mother ship.
Next year we will send people, including me, into space. Once we start sending people into space, we need to work to speed up the process and build as many spacecraft as possible.
Media: You’ve just reached a new milestone for your second spacecraft. Can you explain the progress of the project?
Whiteside: This is obviously a huge milestone for any spacecraft. Now you can turn on avionics, turn on electrical equipment, all of which are powered by on-board batteries. This is a big deal. And I think the most exciting thing is that the structure is starting to look like a spaceship.
Media: Earlier you discussed the company’s financial position and pointed out that the reason for the slow growth in revenue was that the tickets had not been sold. How important are more spaceships? When do you expect to open ticket sales again to generate more revenue?
Whiteside: More spaceships are critical to our business. We need to increase the volume of service for the market and we are confident that we can sell all tickets. We’ll have a spaceship to provide commercial services, and soon we’ll have one. In the master plan, we have a spaceship in operation every year.
You know, we have about 600 customers who have already paid. But since December, more than 3,700 people have made bookings since we opened up the booking feature. This is a great encouragement to us. We are encouraged that these people know the price of the ferry ticket.
Media: Please explain to me the ticket pricing plan again. As far as I know, the price goes up first and then down. Can you explain it in detail?
Whiteside: Yes, prices will go up a bit, and to be honest, we’re going to use dynamic pricing. We think we’re… Frankly, we may have underestimated the cost of time. But for those who had already paid for the ferry tickets, they were early adopters. We will increase the price to reflect the costs associated with it. But over time, our entire business will continue to reduce costs. In essence, this is market-driven and a long-term goal.
Media: What do you think is the main way to reduce costs? What do you need?
Whiteside: There are a few different aspects. One of them is to make spaceships more efficient — when we build more spacecraft, our unit costs will fall. The same is true of equipment such as rocket engine fuel tanks. We have integrated innovation to reduce costs while ensuring quality.
And there’s an interesting dynamic in the industry, and once you have a bunch of people who can operate a spaceship, it doesn’t really take that much more people to put it into operation. We think it only takes about 10 to 15 percent of our hands to increase. So you can see that with multiple spacecraft, the economy of each flight actually gets better.
Media: You’ve had a string of milestones recently. Today’s launch comes two weeks after the launch of passenger spacesuits. What’s next and when can we look forward to the next space flight?
Whiteside: We’re going to have more interesting things going on. I don’t want to reveal what it is for the time being. We need to complete the migration to the U.S. spaceport before we begin the final phase of the test flight program. If all goes well, we can then complete Richard’s historic first flight.
Branson: As for who will be with me, we’ll announce soon!
Media: Can you tell me how many people want to go with you?
Branson: No, I’m afraid we’ll keep it a secret, but thank you for your concern.
Media: What’s it like to see the company start trading on SPCE today?
Branson: It took us 15 years to get there, and 1,000 engineers worked hard and went through a lot of ups and downs. That’s great. We are also lucky to have sPCE trading codes. It’s the generosity of the exchange, and we’re very grateful to them for letting us have it. It would be nice to use the stock code SPCE as our logo.
Media: You mentioned ups and downs, long roads. I’m curious, for those who are wary of investing in the first publicly traded manned space company, do you have anything to say?
Branson: That doesn’t seem to be a problem. I mean, there are a lot of institutions that join us, including the best-known institutions. The public seems to be pouring in in considerable numbers. It’s an exciting company, but it’s also a company with great return potential. We will do our best to respect all investors.