Richard Branson's Virgin Galactic Is a Huge Financial Risk
Richard Branson is taking Virgin Galactic public and some hedge funds are along for the ride. It’s a risky proposition.
Up, up and away.
Source: Virgin GalacticInstead of reaching for the stars, much of the technology industry seems preoccupied nowadays with finding new ways to serve up advertising or to keep eyeballs glued on cellphone screens.
It’s refreshing then that from Monday you’ll be able to buy shares in a company, Virgin Galactic Holdings Inc., whose core business is suborbital space travel. Richard Branson’s pet project will doubtless provide a thrilling service, but as an investment it’s not for the fainthearted. Virgin Galactic expects to be valued at $2.3 billion. Deduct its cash and that’s three times the revenue it might generate in 2023 and 7 times expected Ebitda (a measure of cash earnings). That’s a sky-high price for a business with so much to prove.