Virgin Galactic Goes Public on Monday

SpaceShipTwo after being released for its final flight. (Credit: Virgin Galactic/NTSB)

On Monday, Virgin Galactic will become the first space tourism company to be publicly traded on a stock exchange — without having flown a single space tourist in the two decades since Richard Branson founded the company.

The move to list on the New York Stock Exchange (NYSE) comes after shareholders of Social Capital Hedosophia (SCH) overwhelmingly approved an $774 million acquisition deal on Wednesday. The proposal received more than 95 percent of the 61.3 million votes cast.

SCH is a holding company set up to acquire another company that already trades on the NYSE. With the acquisition, the fund will begin trading under the Virgin Galactic name on Monday.

The $774 million deal will add $452 million in cash to Virgin Galactic’s balance sheet. Existing shareholders will receive $274 million and 100 million shares in rollover equity. An additional $48 million will be used for transaction fees.

Virgin Galactic said it has invested more than $1 billion into Virgin Galactic and its sister companies, Virgin Orbit and The Spaceship Company. The amount includes $390 million from aabar Investments, the sovereign wealth fund of Abu Dhabi’s government.

The SCH deal came in the wake of the failure of larger deal that was derailed by an international scandal.

In October 2017, the Virgin Group announced a non-binding memorandum of understanding (MOU) with Saudi Arabia’s Public Investment Fund (PIF) for an $1 billion investment in Virgin Galactic, Virgin Orbit and The Spaceship Company.

Under the deal, PIF would have taken a “significant stake’ in the three companies. The MOU included an option for the sovereign wealth fund to invest an additional $480 million in Virgin’s space ventures.

On Oct. 2, 2018, Washington Post columnist Jamal Khashoggi disappeared after entering the Saudi Arabian embassy in Istanbul, Turkey. American and Turkish intelligence agencies concluded Khashoggi, a Saudi national living in the United States who was critical of his nation’s leadership, was dismembered by a hit squad sent from Saudi Arabia.

Amid international outrage over Khashoggi’s disappearance, Branson announced a suspension of talks with Saudi Arabia over the planned investment.

U.S. agencies concluded that Crown Prince Mohammad bin Salman, who is the effective leader of his country, ordered the assassination. The crown prince denied the allegations. Eleven people were arrested in connection with the death.