Many people dream of going to space, and Virgin Galactic Holdings (NYSE: SPCE) wants to make that dream come true for thousands of passengers. The company is seeking to offer space tourists the opportunity to reach low Earth orbit, and although the price is $ 250,000, Virgin Galactic has many people who have already signed up.
Virgin Galactic’s shares have been turbulent since it was made public through a merger with a special-purpose acquisition company in October 2019. The stock price briefly shot up around $ 40 a share in February 2020 before coming down to earth in the coronavirus bear market, and since then, it has seen both pops and drops. If Virgin Galactic wants to prove itself as a pioneer in a whole new industry, it needs to make these three things happen.
1. Virgin Galactic needs to generate more excitement about its progress in space tourism
The idea of investing in Virgin Galactic is to see members of the general public get on board their space planes and take flight. However, months, if not years, are still lacking, and in part, it’s because the company’s test flight schedule has not kept pace with what investors would like to see.
Image source: Virgin Galactic.
It is true that the COVID-19 pandemic has been a factor in delaying Virgin Galactic’s plans. The space tourism company has had to take steps to protect its employees, and that includes limited operations in recent months.
However, even the company’s earnings presentations are not as direct as they might be about Virgin Galactic’s expectations. Slides from the last quarter said the company remains “focused on completing the test flight schedule as soon as possible,” but was missing many details. With 24 of the 29 elements of the Federal Aviation Administration’s verification and validation program completed, Virgin Galactic is approaching, but cannot commit to a time frame that will allow it to generate the buzz that rival SpaceX has made with its launches. .
2. Virgin Galactic has to take people to the International Space Station
Just earlier this week, Virgin Galactic announced that it had signed an agreement with the National Aeronautics and Space Administration to collaborate on ways to bring more people to the International Space Station. The deal calls for Virgin Galactic to identify those willing to pay for private astronaut missions to the station, as well as coordinate the logistics involved in putting those buyers into orbit.
Once again, the association’s success depends on Virgin Galactic successfully passing its trial program. In the future, testing the missions of the International Space Station will allow Virgin Galactic to come up with other ideas for their business, including perhaps building their own private orbital facility.
3. Richard Branson needs to demonstrate his true commitment to Virgin Galactic
It is impossible not to draw parallels between Elon Musk’s SpaceX and Richard Branson’s Virgin Galactic. However, while Musk has remained fully dedicated to SpaceX with a sizeable stake in the property, Branson recently showed his willingness to sacrifice his commitment to Virgin Galactic when times got tough for the rest of his empire.
Specifically, Branson has struggled with its Virgin Atlantic airline business, and resorted to selling part of Virgin’s stake in the space business to generate cash to bail out its airline. With constant pressure on the airline industry, it is unclear whether future sales may be necessary.
Much of Virgin Galactic’s shareholder value is tied to Branson’s genius. Losing that as an asset would be a huge blow, and Branson needs to find a way to show that he still believes in the full potential that Virgin Galactic has.
They all go for launch
Virgin Galactic shareholders still have high hopes for the space tourism company, and it has come a long way already. To deliver on its promise to optimistic investors, Virgin Galactic now needs to move forward to show the world that it will deliver on its ambitious plans and put ordinary people in space.
