Key points:
- Virgin Galactic stock price surged 11.2% after opening space bookings.
- The company is hoping to attract its first 1,000 clients by the end of 2022.
- Customers can deposit $150,000 to book a flight that costs $450,000.
The Virgin Galactic Holdings Inc (NYSE: SPCE) stock price surged 11.2% after confirming that ticket sales for its first space flight would open on Wednesday, 16 February 2022 to the public.
Investors cheered the move, evidenced by the rally in SPCE stock during premarket trading. The Space tourism company has taken a while to launch commercial space operations amid multiple delays occasion by spacecraft testing.
Virgin Galactic shares have fallen since shooting higher in the lead up to Richard Branson’s first trip to space aboard its first-ever flight in July 2021 but have since fallen from a high of $57 to their current price of $8.
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However, today’s announcement could mark a critical turning point for the space tourism company, which expect to attract its first 1,000 customers during this initial booking phase.
The list price for the space tourism tickets is $450,000, with the company accepting an initial deposit of $150,000, implying that the company could generate $450 million in sales from its first customers.
The monies generated could give Virgin Galactic a solid financial base as it commences commercial flights.
Michael Colglazier, Virgin Galactic’s CEO, said: “At Virgin Galactic, we believe that space is transformational. We plan to have our first 1,000 customers on board at the start of commercial service later this year, providing an incredibly strong foundation as we begin regular operations and scale our fleet.”
However, while the company targets to attract at least 1,000 customers by the end of 2022, Wall Street analysts project that the space tourism company will generate $8 million in revenues this year.
The analysts’ projections are based on the fact that taking 1,000 people to space could take multiple months and hundreds of flights.
However, Virgin Galactic’s shares would still rally if the company attracts 1,000 clients to pay the $150,000 deposit generating $150 million in working capital for the company. Taking such deposits would leave the firm with a significant backlog of flights.
Virgin Galactic shares look pretty attractive at current prices after falling 85% in the past 12 months. Since the year started, the stock has fallen 39%, and I would buy at current prices.
*This is not investment advice. Always do your due diligence before making investment decisions.
Virgin Galactic stock price.
Virgin Galactic stock price surged 11.18% premarket to trade at $9.03, rising from Monday’s closing price of $8.14.