Virgin Galatic

Some kids love dinosaurs, some love cars,…I obsessed with outer space as a child. Touching the stars, seeing planet Earth below, and stepping where few before stepped dominated my dreams. Believe it or not, I contemplated becoming an astronaut because I wanted to go to space that badly. Then, I found out how much work it was and decided writing about it might be easier and safer.

One company is working to allow average people like you and me to go to space is Virgin Galactic (SPCE). Its work and data are used both on the consumer level as well as the private level. 

Virgin Galactic is an American is an American spaceflight company that is aiming towards providing suborbital flights for space enthusiasts. On May 22nd this year Virgin Galactic announced its first successful human flight, flying out of my home state, New Mexico. 

Virgin Galactic has not announced the cost of one of their space tickets, but on the website, from what I can tell the tickets will cost more than $250,000. This makes the market for Virgin Galactic very slim. So, much for that you and me going to space thing, eh? Only high-net-worth individuals will be able to take a flight through Virgin Galactic. I see this as a potential problem. In my view, this feels like something you do one time. It’s not a Disney World roller coaster you get off, then immediately sprint to get back in line. The audience will be limited because I doubt there are many folks paying $250,000+ ticket more than once.. 

One thing that Virgin Galactic (SPCE) does have is cash. Currently, they have an estimated $650 million in cash, with a burn rate of around $70 million, they still have quite some time to begin generating revenue. 

One thing that is intriguing about Virgin Galactic is their thesis on high-speed global mobility technology, making claims to significantly cut down on travel time. The CEO wants to be able to get it into local airports and let it connect to other places. If Virgin Galactic can cut down the ticket price and provide fast travel, I think there is a large market for that. This is their sweet spot. As an investor, developments in that area set up Virgin Galatic as a potential winner.

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