Virgin Galactic shares cool off as losses widen
Virgin Galactic shares have come back down to earth after the company’s losses widened in the fourth quarter, pausing a meteoric rally that has seen the space flight group triple in value this year.
The company, founded by Richard Branson, along with Elon Musk’s SpaceX and Jeff Bezos’s Blue Origin, has set off a fresh wave of enthusiasm for space exploration as Virgin Galactic races to send tourists into orbit. Virgin Galactic has booked more than 600 reservations, and it announced on Tuesday it will accept deposits for the next round of ticket sales.
Betting heavily on the future of space travel, investors have bought up shares in Virgin Galactic, the only publicly listed space tourism group, at a rapid clip. The stock closed at $34.04 on Tuesday, up 195 per cent since the start of the year and giving Virgin Galactic a market capitalisation of $6.7bn.
Virgin Galactic reported a net loss of $73m in the December quarter, compared with a $46m loss in the year-ago period. Adjusted Ebitda, a measure of profitability, came in at minus $55m, worse than the $45.7m loss expected by analysts.
Revenue also fell short of expectations, falling to $529,000 from $1.3m. Analysts were looking for $1.1m in revenue, according to Refinitiv.
“The progress we made in 2019, combined with the high level of interest from potential customers, underpin the steps we are taking toward reopening ticket sales,” chief executive George Whitesides said. “We are continuing to build on our strong momentum as we enter the most exciting chapter of our story to date and prepare for commercial launch.”
Mr Whitesides told analysts during an earnings call that Virgin Galactic expects revenue and cash flow to ramp up in 2021. It plans to launch a flight later this year with Sir Branson on board.
Virgin Galactic has received 7,957 registrations of interest in space flights as of February 23, more than double the amount it recorded at the end of September.
The California-based company said it will begin taking $1,000 refundable deposits on Wednesday as it prepares to release the next tranche of tickets to the general public. Customers who place a deposit will reserve a spot at the front of the line when seat reservations become available.
Prices and timing for the ticket release were not revealed. Current reservation holders paid around $250,000 per seat.
Shares were down 5.8 per cent at $32.06 in after-hours trading.