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Virgin Galactic Makes Historic Move, Ex-Facebook Star Plays Key Role

By  James Barrett
DailyWire.com
Virgin Galactic’s SpaceshipTwo takes off for a suborbital test flight of the VSS Unity on December 13, 2018, in Mojave, California. – Virgin Galactic marked a major milestone on Thursday as Unity made it to a peak height, or apogee, of 51.4 miles (82.7 kilometers), after taking off attached to an airplane from Mojave, California, […]

This week, Sir Richard Branson’s Virgin Galactic announced a history-making move: it will become the first ever publicly traded space flight company. For the price of $250,000, Virgin Galactic will offer wealthy adventurers a chance to experience space, if only for a few moments. An essential part of making Branson’s decades-long goal a reality is, of course, the ability to fund the extremely costly space travel business, and to help do that a former Facebook executive has joined Branson to take the company public.

“Virgin Galactic is set to arrive on the stock market with not one, but two big characters at the helm,” Financial Times reported Thursday. The first is Branson, “a natural marketer who has been able to keep the believers in tow through years of setbacks.” The other is former Facebook executive Chamath Palihapitiya, whom FT describes as “a Silicon Valley financier with a loud mouth and a willingness to make enemies.”

In a lengthy profile of Palihapitiya, Financial Times provides more details about how the financier is using Social Capital Hedosophia (SCH), “a blank cheque company that raised $600m on the New York Stock Exchange,” as a shell to move tech companies to the public markets “without the fuss of a traditional IPO process.”

After having effectively “laid dormant” for two years, SCH purchased 49% of Branson’s Virgin Galactic Tuesday, which cost SCH $700 million and another $100 million of Palihapitiya’s personal money. The deal “is one of the highest-profile transactions during the recent boom for special-purpose acquisition companies, or SPACs,” FT notes.

Like many of his moves, Palihapitiya’s decision to invest in space tourism comes as a bit of a surprise, as he originally said he’d invest in larger value companies than the estimated $1.5 billion worth of Branson’s space tourism company.

“The filter was really less about the market size,” Palihapitiya said, FT reports. “What I was trying to say there . . . is how important it was for us to find a fast-growing technology company that can thrive in the public markets and that was a really indelible consumer brand, and I think Virgin is all of those things.”

Branson famously pulled out of a potential deal with Saudi Arabia last year after the assassination of journalist Jamal Khashoggi. The Verge reported at the time:

Last year, the Virgin Group announced that Virgin Galactic and its spinoff companies, The Spaceship Company and Virgin Orbit, would receive an investment of $1 billion from Saudi Arabia’s Public Investment Fund. The money was meant to help further the development and testing of Virgin Galactic’s spaceplane, which is meant to take tourists into space for brief periods of weightlessness, as well as Virgin Orbit’s rocket, designed to deploy from the wing of a carrier airplane. There was even talk of using the money to help further Virgin’s dream of creating point-to-point travel — the concept of using rockets to quickly carry people to different places on the Earth. In exchange, Virgin might help with the creation of a “space-centric entertainment industry” in Saudi Arabia.

But after the disappearance of Khashoggi, Branson announced that he was suspending his discussions with Saudi Arabia, writing in a blog post:

What has reportedly happened in Turkey around the disappearance of journalist Jamal Khashoggi, if proved true, would clearly change the ability of any of us in the West to do business with the Saudi Government. We have asked for more information from the authorities in Saudi and to clarify their position in relation to Mr Khashoggi.

While those investigations are ongoing and Mr Khashoggi’s whereabouts are not known, I will suspend my directorships of the two tourism projects. Virgin will also suspend its discussions with the Public Investment Fund over the proposed investment in our space companies Virgin Galactic and Virgin Orbit.

When that deal fell through, Palihapitiya started to take a close look at a potential acquisition of Branson’s company. Palihapitiya reportedly contacted him after a successful test flight in December last year, the talks moving forward over the last six months and culminating in the announcement this week.

Related: Ted Cruz Calls For Greater U.S. Investment In Space-Based Interceptor Technology

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