Richard Branson‘s space travel company, Virgin Galactic, was listed on the New York Stock Exchange on 28 October after opting for a merger with a special purpose acquisition company (SPAC) rather than a traditional initial public offering (IPO).
Virgin Galactic received more than $450 million from the deal.
The SPAC, Social Capital Hedosophia Holdings (SCH), was set up by former Facebook executive Chamath Palihapitiya in 2017. It was floated on the NYSE in September of that year through a IPO that raised $600 million from investors. Such offerings are referred to as “blank check” IPOs, because the investors do not know what the company’s managers will do with the money.
In this case, it took about a year and a half for SCH to find a suitable acquisition target. SCH signed the merger agreement with Virgin Galactic on July 9.
Virgin Galactic’s original shareholders will continue to own nearly 59% of the company.
Palihapitiya, who was a senior executive at Facebook during the social media company’s early days, has become the chairman of Virgin Galactic as a result of the transaction.
Virgin Galactic manufactures space vehicles at a factory in Mojave, California, through a subsidiary called The Spaceship Company. Its commercial operations, meanwhile, are housed at Spaceport America in New Mexico.
So far, the company has booked reservations from more than 600 people in 60 countries. The prospective space travelers have paid deposits totaling $80 million.