DEBATE: Virgin Galactic is planning to float on the New York Stock Exchange – is going public a wise move?
Virgin Galactic is planning to float on the New York Stock Exchange – is going public a wise move?
John Mullins, associate professor of management practice at London Business School, says YES.
It was exciting to learn that Sir Richard Branson is planning to float his space venture Virgin Galactic on the New York Stock Exchange.
Space travel and the technologies that underpin these heretofore-fanciful notions from the era of the “white heat of technology” are finally back centre-stage – not just as an enthralling piece of international theatre, captivating us just as it did in the 1960s, but as an exciting business proposition.
Billionaire entrepreneurs such as Elon Musk and Jeff Bezos are breathing life into these industries, supporting the commitment to innovation and drawing on the necessary oxygen: a bold, adventurous spirit of exploration.
Branson rightly fits into this community of entrepreneurs. He has the vision, the ability to forge alliances, and – most importantly – the skill to attract investment, from Boeing HorizonX Ventures and also from his customers, having already sold 600 tickets to take passengers into space, at $250,000 each.
With such achievements already, why not float?
Leon Emirali, an entrepreneur and investor, says NO.
I understand Richard Branson’s logic. He’s rich, but he’s not Elon Musk or Jeff Bezos rich. Going public allows him to raise funds for the astronomic expense associated with undertaking a private space venture and to compete with the likes of SpaceX and Blue Origin.
However, the market simply isn’t ready to invest in this type of business.
Bezos is treating Blue Origin predominantly as a philanthropic venture. Musk’s SpaceX barely turns a profit. The reality is that space ventures are expensive and incredibly complex. It will be several decades, perhaps even centuries, until the demand for the services offered by these organisations reaches a commercially viable level.
Virgin Galactic should be admired for its ambition to go public, but the timescales for meaningful returns mean that this IPO is unlikely to set the world alight.
Perhaps Branson’s IPO strategy is following the old adage: “shoot for the moon – even if you miss, you’ll land amongst the stars”.
Main image credit: Getty