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Virgin Galactic is hovering in its IPO



The startup is traded under the ticker "SPCE," replacing the IPOA moniker that Galactic's merger partner, Social Capital Hedosophia, has been trading since 2017.

Bold blue banners decorated the NYSE building in downtown Manhattan on Monday to announce Galactics arrival.

IPOA shares rose 11% on Friday after shareholders formally approved the merger agreement last week. And SPCE was up about 5% in the first few minutes of trading Monday morning, at just over $ 12 a share. IPOA began trading in 2017 for $ 10.

Venture capitalist Chamath Palihapitiya created Hedosophia as an "empty check" investment tool that collected money while the handlers searched for a takeover target. When Galactic and Hedosophia announced their merger agreement in July, the total value of the companies was estimated to be about $ 1

.5 billion. Palihapitiya also personally invested $ 100 million of her own money in Galactic.

Branson started Virgin Galactic in 2004 after seeing a privately funded three-seater space rocket into the upper atmosphere to win the Ansari X Prize.

Branson's company purchased this technology and has been working for the past 15 years to create a larger rocket-propelled aircraft capable of catching up to six paying customers on short flights to the edge of space.

The company says it will be ready to start commercial operations next year.

Galactic CEO George Whitesides called the company's debut on the NYSE "the beginning of a new era for the human aerospace industry."

"Now that VG is a listed company, anyone can invest in a human space company that strives to truly transform the market and be part of the excitement of the commercial aerospace industry," Whitesides said in a statement.

  Virgin Galactic unveils Under Armor space suits
Some analysts have questioned how much demand for commercial space tourism is and whether enough of the world's ultra-wealthy will be drawn to the business to make it financially sustainable. Galactic has charged its current book with around 600 customers between $ 200,000 and $ 250,000 per ride to space.

But Galactic says there is enough interest in supporting one or more tourism companies, and that there is a long list of people who have shown interest in buying tickets the next time they go on sale.

New Space investing

Galactic is the first big name in the growing space startup industry that made the leap into the public markets. Entrepreneurs have created rocket and satellite upgrades for years, but only recently have commercial businesses made significant progress in an industry notorious for high upfront costs and high risks.

The biggest name on the scene, Elon Musk's SpaceX, launches rockets and spacecraft for NASA, the US military and commercial satellite companies. But Musk has said he will avoid announcing SpaceX until the company has achieved some of the more risky milestones Musk has laid out – including building a rocket capable of establishing a human settlement on Mars.

And Blue Origin, which is gearing up to compete directly with Galactic in the suborbital space tourism market, is funded directly by Amazon billionaire Jeff Bezos. He said he sells about $ 1 billion or more worth Amazon ( AMZN ) shares each year to keep his company afloat for cash, and Bezos has not discussed plans about taking Blue Origin public.

Many of the other space launchers – who pursue everything from rockets to satellite software – play the venture capital game.

Wall Street predicts a big boom in the wider aerospace sector. Top financial institutions, from Goldman Sachs to Morgan Stanley, predicted they would grow from about $ 340 billion to $ 1 trillion or more over the next two decades.

Correction: An earlier version of this story identified the wrong number of seats on the astronaut Ansari X award-winning.


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