Virgin Galactic Loses 20% During First Four Days Since Going Public

Virgin Galactic Holdings Inc. (SPCE) has had a rough first three days as a publicly-traded company. The stock dipped 11% on Oct. 31 to close at $9.41, taking its decline this week to 20%.

What Happened

The space tourism company went public on the New York Stock Exchange Oct. 28.

Why It Matters

Virgin Galactic is a space tourism company, aiming to fly people to space regularly. While there are competitors, including Elon Musk’s SpaceX and Jeff Bezos’ Blue Origin, no company is currently operating regular flights to space. Virgin Galactic is planning to commence space flights as early as next year, starting with a group of Italian researchers that want to conduct science experiments in microgravity.

Experts believe that the early struggles of Virgin Galactic, founded by billionaire Richard Branson, is down to the fact that the company hasn’t started operating, making it hard for investors to have metrics to value the company.

“Virgin Galactic does seem to be a very competent company from a professional and engineering standpoint, but they still have a lot to prove as they have yet to actually fly their first customers,” Steven Jorgenson, general partner at Starbridge Venture Capital told Bloomberg.

Virgin Galactic has already taken orders from 600 customers, who have made advance payments of as much as $250,000 for a space flight. The management at the company says it expects to raise fare prices once it starts taking new bookings.

What's Next

Galactic CEO George Whitesides told CNBC on Oct. 28 that his company’s predictions are that millions of people will want to fly to space is the market develops. He believes his company, along with SpaceX and Blue Origin, may be unable to cater to the demands in the space tourism market.

Swiss investment bank UBS estimated in March estimated that the space tourism market could be worth $3 billion within the next decade.