Virgin Galactic share price goes into orbit on test flight success

Much like its plans for commercial ‘space tourism, the Virgin Galactic share price went into orbit yesterday after the company completed its first successful test flight in two years. The company’s value increased by almost 28% to $6.47 billion in just one day after the SpaceShipTwo-class VSS Unity completed a flight 55.45 miles above the Earth over the weekend.

Shares in the space tourism pioneer were among the most actively traded on Wall Street yesterday after the weekend’s inspiring test flight footage was released. The share price opened the week to gains of 14.8%, driven by after-hours trading before almost doubling that initial leap over the rest of the day.

Virgin Galactic was founded by British entrepreneur Sir Richard Branson in 2004 and embarked on a now 17-year-long odyssey to develop commercial spacecraft and a viable business model for taking tourists into orbit around the earth.

Despite the scale of the challenge, and setbacks including the death of SpaceShipTwo co-pilot Michael Alsbury during a 2014 test flight, the company is now on the verge of its first commercial flight. Virgin Galactic hopes to send its first passengers, including Sir Richard, into orbit next year.

After 15 years as a private company, Virgin Galactic went public in 2019. Its share price has since been volatile, as markets grapple with the challenge of how to value a company in a completely new industry. The company’s share price rose dramatically early this year as stock markets, and especially technology stocks, enjoyed a boom.

However, before popping yesterday, the Virgin Galactic share price had gone through a tough few months that saw its value fall by almost 74%. Virgin Investment, Sir Richard Branson’s Virgin Group’s investments and acquisitions vehicle, is still the company’s largest shareholder with a 22% stake.

The company has pre-sold hundreds of seats for its first flights at up to $250,000 per passenger. A quarter of a million dollars buy a seat aboard a flight taking around 2.5 hours in total after the spaceship is released from underneath an aircraft carrier at around 52,000 ft, or 16 kilometres above the earth. The actual suborbital part of the flight will only last around 6 minutes. During that time passengers will be able to release themselves from their seats and float around the cabin.

Sir Richard yesterday called the successful test flight “important milestone for both Virgin Galactic and New Mexico”, which hosts the Spaceport America base from which the flight took off and landed.

Michael Colglazier, the Virgin Galactic chief executive, added:

“We will immediately begin processing the data gained from this successful test flight.”