There is no way this is a business. The sums require such generous massaging just to get to break even it’s migraine-inducing.
Without a capital infusion, read as massive shareholder dilution, they’ll be out of money in roughly 12 months.
Their only asset worth speaking of is the very friendly (€3M a year) lease on the New Mexico spaceport that could be useful for someone who doesn’t want to fight with others when it expires in 5 years.
Most of their other assets are very specific to ‘business’ and have value but not much more than to stick in the aeronautical museum as a folly.
Today’s successful launch was clearly a damp squib if you were hoping it would send the share price sub-orbital.
I agree it’s not likely too be successful business.
I have however jumped in as a swing trade on the run up too commercial operations. I should of sold out on Tuesday when i was up over 50%.
Their still not generating any profits and barely anything in revenue. They need to get tourists actually up there! At least flying a handful every month for the forseeable.
Their burn rate at present is roughly $140 million a quarter with $874 million left in the bank.
You can see them selling more and more of their stake to stay afloat.
Multiple men have tried to work out how to
a. Make this work
b. Make some money doing it.
They’ve all either realised and quit or realised and passed the financial burden onto public market investors.
Burt Rutan, Chamath, Branson.
I have loved space travel for most of my life and the idea that this rocket power glider that needs towing on and off the runway with a 4x4 could be considered in the space breath as the brave and genius work of real space engineering is insulting.
I think the technical challenges are understated and the share price will do well once they start having repeat commercial flights. If they don’t start doing repeat flights by July/August it will be very concerning.
I have moved fully into camp “this is a total grift”. I lost quite a lot of money on this stock, sadly, out of my own foolishness. I wish I had thought more carefully! This is not a good business and I don’t think there is any way it recovers.
It’s better to realise and cut your losses than hang on with blind faith.
Their original pitch deck focused on reducing the ticket price to increase flight cadence and drive cost savings. Before they have completed a successful flight they have almost doubled the price and have no route to cash flow-positive territory. This is just a matter of time before it goes to near $0.
Virgin Galatic has managed to complete another flight which makes 2 flights now. We’ll wait and see if they managed to stay on the route this time or if there were any other flagrant breaches of safety rules.
With a flight cadence of roughly one a month (assuming all goes well with getting the plane flight worth in time from their own internal expections) the business maths looks like this
1 flight a month = 3 flights a quarter
3 x $250k = $750k
V
The last quarterly burn rate of $159.4m.
Which number is bigger? It should be the top number, but it isn’t and probably won’t ever be.
That’s without the significant costs of getting the plane stripped down and air worth again.
It’s going to end up like Titan Sub and I can’t believe the Italian Air Force sent their staff on it. I guess I should assume that they know the risks a lot better than me, but I don’t see this death trap having a happy ending over the long run.
$250k per flight? I thought tickets were $400k and there’s at least 4 per flight so $1.6m x 3, $4.8m. Which is still a little below their current cash burn of course.
The current price is $400k however the vast majority of people who have placed a deposit did so at a lower price.
It’s worth noting that in the original S1 their whole business was building towards rapid launches at less than $100,000 a ticket. But you’re right even if they can achieve $400k a seat and meet the flight cadence they’ll still be losing money and that’s assuming you can get the craft flight ready with no additional costs.
This is a matter of time before it fold, it’s a case of when not if.
If the market is still there at $400k then all the better. I was incorrect on last post though, I think next flight has 3 passengers so only $1.2m in ‘current pricing’ equivalent.
