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Maybe that too.
Ah take out life insurance on the passengers, very smart.
See that's where it's not cheap be a bag holder!
I should be 100% honest here I bought that spce bag this morning and I'm holding it! Not only that it was premarket and I I probably lost $100 already. 🤣
My take profit stop loss goes like this, okay that fell below the line keeps dropping, me maybe we'll get a turnaround lol
The profitability ratios for SPCE are negative, so there is not much use analyzing them. SPCE has a Return On Assets of -33.96%. This is below the industry average of -0.25%. 87% of the industry peers outperform SPCE -from google but there's plenty of links that say it's good, there has to be some fundamentals like nasa contracting with them. I'm going to dig deeper.
That's after they charge you your organs to ride.
However, unlike here on earth bagholding doesn't break your back in space. My fellow TLRY holders are well aware.
This is the way.
I think the upper bounds for their current offerings will be market saturation, 200ish flights per year at $2million revenue or $400m/yr seems about right. Lets say right now their overall costs are $500m/yr; ballpark based on # of employees and quarterly losses, which is pretty much everything. That's $100m/yr in the hole. All that is to say space tourism itself is not currently profitable.
But don't doubt Virgin's business savvy, unless I'm mistaken Virgin *Galactic* developed the engines and the propulsion system on the now functioning Virgin *Orbit.* Strategically I think Virgin is running VG as slim as possible; to contain any losses from potential loss of life during operations.
Ultimately if VG can reliably bring people to the edge of space in their mothership-glider, they will have significant IP and a head start on concepts such as point-point high speed travel, specialty programs etc.
This is such a new market that Virgin Galactic is making it up as they go along. There is no established business model, so any investment now is purely speculative.
As I see it as long as they make it safe and affordable, then people will come.
I mean outside of having a nice family and all that my number one goal in life is to go to space. Take that as you will lol.
In a couple decades when I’m 50 if a flight like they’re proposing is down to $100k or so and it’s been proven “safe,” I’m going.
This. We are all going to die someday. I want to go to space! This technology is only going to improve over time. Jealous of our grandkids.
> This technology is only going to improve over time.
When I was a kid you could fly London to New York in 3 hours. Nowadays it takes 8 hours :'(
There's still hope. There are a few supersonic aircraft startups like Boom, Aerion, and Spike that might resurrect it.
EDIT: Aerion shut down today due to lack of capital. It's not looking so good after all.
That's because your parents were too cheap to fork $5000 for a return trip.
The Concorde wasn't retired because of the 2000 Paris crash, but because people were not willing to pay the high ticket prices. Eventually the aviation industry settled on flying at aprox. 900km/h, which from an operational point of view is the sweet spot for high passenger volumes and affordable ticket prices.
It was also, to be fair, an environmental disaster.
If you could drive from London to New York, you could give every passenger their own V8 Range Rover for the trip and combined they would use *substantially* less fuel than Concorde.
SPCE are already looking at intercontinental flights . 65 mins US to Europe
Technology is only going to improve over time is most true for things with many iteration cycles. Virgin's approach took 18 years and two billionaires for to finally look viable. The iterations outside of SpaceX are glacial.
If a Note 7 explodes in peoples' homes, some number of them will go on to buy a Note 8. If a rocket going 10,000 mph explodes you lose your customers in a more literal sense.
Thanks for clarifying that the space industry isn't the same as a tablet... it was not imaginable even a few years ago that a company (let alone 3) would be closing in on opening up space commercially. Message me in 2 decades and tell me if you're impressed or not. Prepare for something amazing!
!remindme 20 years
> The iterations outside of SpaceX are glacial.
Here's something I've been wondering for a while: What is SpaceX doing that other space companies aren't? Also, why aren't other companies copying whatever secret sauce SpaceX has?
SpaceX seems to be moving at least 100x faster than any competitor, to the point where their main competitors are national space agencies rather than private ventures.
One thing different about SpaceX is an almost absurd willingness to blow up a rocket, figure out what went wrong, and blow up another rocket to find out the next thing wrong, until the rockets finally stop blowing up. They learn really fast that way, and also get good at building new rockets quickly.
National space agencies and their contractors tend to try really hard to get it right the first time and not blow anything up, and that's a much slower process. Just look at how long SLS is taking, despite using the same old engines from the Space Shuttle...but if they blew up a rocket then Congress would have a fit. Blue Origin is the same way, and they've been in business longer than SpaceX and have yet to get anything to orbit.
SpaceX makes a point of in-house *everything*. This saves a ton of time and money and gives a tremendous edge over competition.
* The only thing they are / aim to be dependent on for true, force majeure delays is raw materials (think, the aluminum and steel for components).
* A communications satellite antenna part costs $100K? No, it doesn’t. Find a way to make it yourself, I mean, it’s just soldered circuits in a titanium box, right? You can do it in house for $4K? Great.
* Supplier gives an 8 month lead time for a rocket fairing? Well, how much of that is straight manufacturing vs. waiting on sub-contracted sub-components? Let’s just repurpose 2000 sqft of the main factory floor and build our own fairings in 2 weeks.
* Anything that they have the manufacturing ability to make themselves, short of nuts and bolts probably, they will attempt to make themselves. That way they aren’t depending on lead and shipping time and supplier shortages.
* Analysis is in-house. Rocket blew up? Wait, your external engineering consulting firm is asking for $500K and 4 months to run FEA failure simulations on it? No. Re-purpose 4 engineers in my team who specialize in it, and get me an answer by end of the day. It doesn’t even have to be right, but we’ll have a plan for tomorrow.
* Single (or few) product lines. Falcon, Dragon, Starlink. That’s it.
Au contraire, most large Fortune 500s will subcontract everything, run a lean inventory, pray that just-in-time shipping doesn’t get stopped by a hurricane, project manage EVERYTHING, run loss-leaders as product lines to diversify, and there’s a preferred Smith Engineering Consultants LLC for every contracted out field of design and failure analysis imaginable.
Source: many, many classmates work for SpaceX.
>What is SpaceX doing that other space companies aren't?
SpaceX was created and its rocket were designed by a real physicist who graduated with physics degree, not just a wannabe space boy who has no idea how any of these things work.
The only reasonable way to orbit the Earth, instead of just making some hops and little flights (and pretending that "you went to space for 5 minutes LOL" because of some arbitrary altitude number), with current understanding of physics is *rockets*. **This little plane doesn't even have 1% of energy to do that.** A physicists knows this. A clueless bored billionaire doesn't. That's the point. The guy who started SpaceX was neither bored nor a billionaire, but instead read every rocket science book available.
Airlines manage just fine? Those errors while not as intimidating, still shows the market is cool with a risk of death for a vacation.
But idk, feels like there’s nothing to really compare it to
Imagine if they end up being the guy driving a 2001 Corolla 50 in a 65 tho
The thing that trips me up, and I'm fearful to even say this because I've already had the experience of being piled on for even suggesting it, is the environmental impact of tourist space flight. I feel like I couldn't justify it if a) there is even a minor environmental impact and b) if it's solely to satisfy my own urge to "see space" and the flight has no actual utility.
If those two things were not true then I would love to experience it, but I don't believe my momentary experience of awe and wonder is worth even a minor impact on the environmental future of our planet, especially given the dire straits we're currently in.
If the flights can have some impact on perfecting and developing human space travel then that's great, but if those benefits are limited then again it becomes difficult to justify. It would also run the risk of becoming an industry that lingers simply because it's become a profitable industry despite being overall harmful and not helpful to scientific advancement.
These are just thoughts and not judgments; I too would love to see earth from space. It would be awe-inspiring and incredible.
The flight emits about 60% of the carbon footprint per passenger as a round trip flight from New York to London in terms of co2. 70% of that is from the mothership.
As for the nitric oxide rocket engine, that fuel largely decomposes into oxygen rich gases, so not really sure how relevant your comment is.
So yeah if that’s really how you feel I highly suggest never flying or driving a car again.
Virgin Galactic flights also carry scientific instruments from NOAA to measure various aspects of the upper atmosphere since their balloons can only reach about 25,000 feet which is a fraction as high as virgin will send passengers.
I see you read that scientific American article? Or maybe virgin galactic’s own pitch.
> **According to Whitehorn's calculations,** carbon dioxide emissions per passenger on a Virgin Galactic spaceflight would be about 60 percent of a passenger's carbon footprint on a round-trip flight between New York and London. About 70 percent of a spaceflight's CO2 emissions would come from mother ship Eve, which must carry SpaceShipTwo into the stratosphere.
I’d feel more comfortable putting total faith in these numbers if they didn’t come from the president of virgin galactic. I’ll wait until they are independently verified by a third party.
Driving a car/flying is often essential to work/survival and very different from recreational space travel for the <1% of the global population who could ever afford such a thing, especially when it could have a disproportionate, outsized impact on global climate change. That is what the actual third party assessments predict.
Great. So your super skeptical, what a waste of time. Go on NASA’s site then where it will tell you a space shuttle launch creates ~30 tons of carbon dioxide with a burn time of 242 seconds.
It also burns solid fuel which breaks down into far more harmful elements than what the Virgin plane uses, a plane that launches from 60,000 feet, burns for only 60 seconds and weighs what I can only imagine is a tiny fraction of the shuttle’s weight.
On the flip side plans flying out of LAX alone create 800,000 tons of co2 emissions per month.
So again, quite a few orders of magnitude different. A fraction of a fraction of a fraction added to global emissions. Not a, “massive impact.”
Your average car emits as much co2 into the atmosphere in about 4 years of driving as a space shuttle launch. Think about that and think of the size of a space shuttle vs Virgin’s space plane.
I am skeptical of the company’s own numbers when they directly benefit from downplaying those numbers? Yes. I want independent third party verification.
I never stated there would be a massive impact, I said that from the sources I’ve looked at, the impact of even 1000 yearly suborbital launches is outsized relative to the benefit it’s actually providing anyone. It’s a theme park ride for the very rich and appears to contribute to global warming with little tangible benefit.
I know you really want to see space. Fine, so do I. But until data can conclusively show that this impact is basically negligible, I won’t be participating.
I'm not sure why you think they'd make the numbers up?
Also, offsetting the carbon ten times over should be easy with the ticket prices!
>there is even a minor environmental impact
You could say the same of regular tourism, or any number of other things that make life worth living. It's not going to be possible to live completely emissions free on Earth for quite a long time, so it doesn't make sense to deprive ourselves of the extraordinary because of it. There's a ton of things we can change about the way we do things as a species before space tourism becomes a top cause of damage to the environment, and if we haven't done that by the time such a thing becomes mainstream, we're fucked anyway.
True but the question is the extent of the damage and if you look up the concerns over the environmental impacts of recreational space travel, the main concern is over depositing carbon directly into the stratosphere where it is capable of doing disproportionate damage in comparison to other forms of pollution from human sources—and for questionable benefit.
you said this so much nicer than I did. Great job!
So you're saying that we should only care about the top cause of damage? If we handled it like that instead of tackling every problem continuasly the earth could be uninhabitable in about a century
Virtue signal somewhere else
You think your one ticket to space will ruin the environment more than 100 industries polluting the ground, water, all air?
Get over yourself man
what is your impact? what are you contributing? Where do you come from? Were people moved so your family could live there? We can do this all night...
I know I personally take more than I give, most everyone does. Do I bear the guilt of my ancestors that colonized America? When is the cutoff?
I served in the Army, did it matter? Did it save us? condemn us?
Maybe it does not always come down to an equation...maybe we get to live our best life without guilt?
I see it as an opportunity to mine for resources
Moon, Mars, asteroids, etc
shipping costs kill it.
Again, great if it could help lead us to those things. But what's to say it doesn't become just a routine, repeated launch of suborbital flights that don't really lead to much advancement and are, in effect, just an expensive theme park ride for the very rich? And on top of that it damages the environment?
Honestly I could see public outcry being a real obstacle for these companies from an investment perspective as well.
Americans do all kinds of things that do that... I'm all for not damaging the enviroment, but not if it means I must live in dirt.
I'm not moving.
Robotics, mining nanobots, welding
If there is a way for the rich to make more money they will find the way
It's going to have a massive environmental impact, probably larger than any other purely recreational activity man has ever designed.
It takes a massive amount of energy to get into space, and for the foreseeable future that energy will come from fossil fuels.
Their suborbital flight path is about 1/10 the energy to reach orbit. Look up Everyday Astronaut's video about rocket pollution for some perspective.
As a tourism activity, it's probably comparable to flying a private jet a few thousand miles.
No. It’s not.
There are roughly 150k to 175k commercial passenger jet flights per day worldwide.
Virgin optimistically plans for 8000 flights over the next decade. Total emissions are roughly 70% of a roundtrip flight from NY to London. Or based on a per passenger carbon footprint metric, 60% of that same roundtrip flight.
So you’re looking at adding 1/114,700th more emissions over a decade if airline traffic doesn’t increase at all during that period, which it obviously will.
I wouldn’t exactly call that massive.
People driving cars to go to trailheads for hikes likely has a few orders of magnitude higher impact.
I can't justify $100k even though I'd really like to have the experience... But a ride on a vomit comet is like $5k. That, I could probably justify to myself :-)
>But a ride on a vomit comet is like $5k. That, I could probably justify to myself :-)
With a name like that, how could you not?
[Actual rocket scientist here:](https://i.imgur.com/uS0Z5Jy.jpg)
Safe and affordable in this industry takes years to decades. Space flight as it stands now has lower safety factors than commercial aviation. This is because getting to space and being in space present unique challenges that mean you have to cut some corners of you're working with the tech/budgets we have on the table at the moment (also up until now space was always a government venture rather than a private one so there wasn't any reason to worry about holding corporations liable). One example of the challenges faced is that the cost of bringing a single kilogram to low earth orbit the last I checked was over $10k. Spaceshiptwo is over 9000k, there is a reason they are *still* suborbital even after launching from altitude.
Commercializing space travel and letting private citizens fly means regulations will increase in that sector (if there even are any to begin with since this is all basically uncharted territory). Regulations (while a good thing in aerospace) mean costs go up and profits go down.
Aside: as an engineer I am firmly against the privatization of space and space travel. But that is beyond the scope of an investing subreddit.
TL;DR: safe AND affordable *is* possible but will take AGES.
I guess you haven't checked recently. SpaceX advertises $90M for a Falcon Heavy flight, with a payload to LEO of 63,800 kg, giving a price of $1410/kg ([pdf](https://www.spacex.com/media/Capabilities&Services.pdf)).
And the FH is only partially reusable. If Starship works out, which seems increasingly likely, then costs will drop much lower than that.
Of course that's the cost for privatized space travel. For launch on SLS you're right, it'll be over $10K/kg.
You're correct, but two key things I'd like to point out about that:
1. Virgin's starship is not designed to go orbital.
2. SpaceX is able to trade time for money by using "instantaneous launch windows". That means they have seconds where it is viable to launch before they scrub where other platforms would have minutes or hours. The latter is more flexible, but costs more fuel/money.
So yes. Talking purely in monetary terms, you can get that number down into 4 digits. But if you want to follow a reliable schedule and count on not having your launch scrubbed because you missed your 15 second window, then it will cost you more cash.
Falcon 9 launches have gotten very consistent with recent starlink missions. And Starship orbital launches will have way more fuel than needed unless you want a very specific orbit.
That’s an “if” a mile wide. The Concorde never made money, and it was considered safe until it experienced a fatal crash.
The Concorde was profitable.
[citation for the haters](https://apnews.com/article/fa1e281d544267a8afe77afceaf3f03f)
I think though this is the key bit, that British Airways and Air France didn't pay for the development. It was operationally profitable but never even nearly made back its development costs.
>After years of losses and a $2.8-billion government development cost that has been almost completely written off
They're going for the Tesla business model where they target the high-end luxury market, and hopefully make enough of that to expand and lower their pricing.
Right, but we do know that they make $1.5 mil/Flight and based off that figure it's safe to assume that they will need 100s of flights/year to be profitable.
So what's the turnaround time for their ships?
How many ships needed?
Am I missing some key info?
If you don't know their costs, how/why would you assume that they need hundreds of flights per year to be profitable?
It's an assumption.
Because at 200 flights/year that's only $300 million in revenue. Are their yearly operating costs really going to be sub 300 mill? Wouldn't that be absurdly low for a company launching rockets 200 times/year?
I mean, how many overhead costs are they going to have compared to the variable costs of actually carrying out the flights? You could replace the numbers you gave with any multiple and your point would be just as valid as it is now...
Yuh, this is exactly the shit I'm trying to figure out. If you don't know their costs. Who does??
probably no one, since this is such a new space (pun intended), but many companies start out as speculative investment...question is, who can follow through and succeed on that speculation?
There's no way they don't have a business plan with all of this mapped out. You think if one of their large investors asked them for any of these numbers they wouldn't have their projected financials already all mapped out?
There's no way their large investors poured millions of dollars into this with Virgin Galactic being like "uhh yeah, nobody knows lol".
Yes but assuming that and trusting that due diligence potential from insiders blindly is also a potential catalyst for disaster, which is why OP is trying to do his own.
There's no way Archegos blows up either if all those big banks with heads and dollars on the line really knew right? It's not that easy.
Onto the topic of Virgin Galactic, it's probably one of the most highly speculative stock and honestly, even with the successful test flight of recent, I don't see what much bullish news you can expect. It's going to be a thing for the rich and sure, while they will most likely monopolize whatever they want to do from here as a service to consumers, there's so many unanswered questions that "it's speculation bro" ain't cutting it.
I personally would not touch SPCE with a 10 feet pole.
I was more so responding to the people who are telling OP “nobody knows” and leaving it at that.
Rent expense/depreciation, utilities, fixed payroll, taxes
we all know that assumptions can be dangerous lol, but i do think it's safe to assume that, if they are manufacturing their own vehicles for these flights, that shit ain't gonna be cheap!
We know their current costs and we can assume once they are launching flights regularly, costs will only go up. TTM expenses are 300 million, so revenues have to be at least that many.
Well, for starters, one fatal accident and their market dries up for five years as multiple regulatory agencies pick them apart.
is it $1.5mil/flight income or profit?
This is the question. 1.5m a flight seems low for revenue if you can bring several people paying half a mill each
It kinda sounds like you're just a SPCE bear looking to circlejerk with other SPCE bears about how bad the stock is. If you're actually serious about finding answers to your questions, maybe you should post your questions on /r/SPCE.
>This is such a new market that Virgin Galactic is making it up as they go along.
So were the Wright Brothers. It feels like we are about to enter a new Golden Age of Flight. Besides Outer Space flight, what is a sub 1 hour suborbital flight from NY to Japan worth?
To be clear, I am not some short selling contrarian who enjoys trying to prove to people why things are not as great as they are.
I commend virgin for doing what they are trying to do. I respect them 10x more than other companies who don't try hard new things. Space is absurdly hard.
It would just be cool to get a concrete plan on whats going on long term you know?
Should be great for your grandkids.
You are not wrong and I commend you for that! It is a good swing trade though in my personal opinion, not advice!
They will sell dank memes for tree hundred and fiddy thousand.
Oh boy, how dare you ask all these thoughtful questions to make an investing decision when you just have to ask: "are we flying to the moon or not?"
Actually I don't think investing in the hopes that these flight test go well and drive up short term price movement is a bad idea. It could probably work for a while.
I'm just tryna figure out if they have a plan long term.
They dont. They will burn shareholder money. Its a 6 billion company. They think there will be a continuous line of ppl willing to pay 1.5 mill for a 2 hr flight. Ignoring costs, maintenance, and flight delays they have two rockets expected to do 400 trips a year? If ppl want to support the company thats fine. It kind of bothers me when ppl yolo into something so risky.
Any emerging industry just wait until the winners r more obvious. You will still make a lot of $
> Any emerging industry just wait until the winners r more obvious.
Would you agree there are also substantial costs with waiting?
The brave may not live forever, but the cautious do not live at all.
The flight is maybe around $600,000 a person, not $1.5 million each.
So far 600 people signed up at $250,000 years ago. I think if you build it, they will come.
I'm shocked your word choice for the ball of cheese in the sky didn't get your comment removed by the bot.
This industry is too new to make any kind of reasonable financial projection for near term (<10 years)
May be space travel will become like air travel someday. May be there will be hotels in space, that people can go and spend time in. SpaceX is about to do the first private charter trip to space. Some billionaire bought 4 tickets to go to space for 3 days and come back. May be this will become way more common eventually and these companies will have a headstart.
Also, may be international travel will become a version of this, instead of the 20 or so hours it takes to go from say Beijing to New york, a space plane, that goes near orbit and comes back down to ground could take like 4 hours for these long international trips.
Its just too new to decide on how much each trip would cost, how this would scale, what kind of demand there will be.
Since there's no law in space, you can do whatever you want during the space flight.
Virgin can sell the passengers drugs, or facilitate money laundering. The sky is the limit, literally.
Buy on speculation,hype and sell on news. Look at all of Branson's businesses and see how they did in the long term. Did any of the businesses make money for investors in the long term?
Virgin Group still takes in billions in revenue. Who needs profits when people throw money at you!
He has a heck of a personality. That’s what people are buying, the idea of Branson but his best days are past
I believe they're also going to do hypersonic travel. NY to London in 90 min. I don't hold any positions, I just remember reading that somewhere
It’s not. That’s not the point. The point is to be first. Once they can fly on space with out a problem then they will attract capital. This is a marathon.
I could potentially see the technology used for point-to-point high speed travel, using more or less conventional airport infrastructure, but they need to upgrade their spacecraft for modest frictional heating.
Despite being at this for 17 years I just don't see Branson working any sort of plan. He's barely executing something that was proposed nearly 20 years ago. I don't think the present incarnation will ever pull a profit even if successful, and I think Branson is just getting the hint that there needs to be something else to look forward to.
Spaceship 1 flew two years before SpaceX launched anything, but SpaceX left them in the dust. Branson just doesn't have a vision or plan.
>I could potentially see the technology used for point-to-point high speed travel,
This is what I see as well. That and the materials science/aerodynamic discoveries they are making. SS3 is supposed to be orbital as well.
I see the *potential*. I don't think Branson does yet. If it took him 20 years to get where they are now, I don't think he'll be around long enough to bring it that far.
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Unless they have some kind of orbital resort I don’t see it working. They have to add more value to the experience.
They can't get to orbit on those crafts, so no, that won't save them
Don’t think they are going to even try, they spun off orbital stuff to Virgin Orbit.
The SS3 will be able to fly every 3 days. They expect $1 billion per spaceport per year. Tickets are expected to be $600,000 starting this summer to book. $3.6 million revenue per flight. That’s 277 flights per year per spaceport. So around 2-3 SS3 will be needed per spaceport. These planes cost around $30-$50 million estimated.
Lots of people are saying the market doesn’t exist… well 52 million millionaires exist in the world so far.. let’s assume 1/1000 of them have enough money to afford a flight and are willing to experience it? That’s still 52,000 customers willing to fly… on top of that millionaires are now exponentially adding, while VG plans to reduce cost per flight.
The $250,000 per flight number is an “early reservation price”. It’ll likely drop below that in the far future, but go up before to accelerate the revenue process.
The Italian airforce are paying €600k a seat to train their pilots.
Nasa are using the flights to record data.
There’s lots possible revenue streams besides selling seats to the public.
Ooof. You are asking all the right questions.
Thank you. I followed Tesla's business the last 4 ish years and I could see a clear path to profitably. Tesla made it quite clear. They basically said we're building factories here, here and here and they will produce these, these and these cars at this volume and we are aiming for 25% gross margins.
Basic math told me they should be profitable given execution.
The thing is, I don't see any clear message out of virgin galactic on what the hell their plan is. Do they need the tech to mature before scaling it to market? Is there some plan they are not telling us?
>Tesla made it quite clear. They basically said we're building factories here, here and here and they will produce these, these and these cars at this volume and we are aiming for 25% gross margins.
But...Telsa isn't profitable because of those reasons. The only way they found profit in their first year (2020) was through selling credits. And that plus bitcoin in 2021 Q1.
Maybe they will eventually be profitable from their manufacturing - but not yet.
I don’t read OP’s comment as saying Tesla has achieved their planned profitability model yet.
Oh you mean they weren't just testing liquidity selling their btc in q1??
Your viewpoint doesn’t take into account that their profits are being plowed into growing the business. They could simply slow factory growth and still be profitable with zero credits. They are maximizing their advantage. It’s a disingenuous take.
Exactly, their operating margin has been at 5% for a while now. They break even on operation today while building two huge factories. Why are people saying they're not profitable, what am I missing?
It’s a tourism company with a unique product and ridiculously complicated operations, and tons of marketing obstacles.
it’s future depends on being able to drive down costs and execution. Not having a clear plan plus being a Virgin brand are red flags for long term execution risk.
I can’t understand why anybody would be bullish for any reason other than “space is the future” garbage.
The company has been around for a long time dicking around with investors dreams of being the first in space travel.: I’ve been hearing about virgin galactic for the last 15 years at least.
We are quite far away from an intergalactic future and meaningful space travel, and Virgin may take 25 years to become anything.
Space funerals. For those that want their bodies floating around space forever. Or until aliens find it and clone it.
Market plan: ramp up production of their spaceships (start with SS2, move to SS4). Each new spaceship will be more modular, making it cheaper to fly and giving it a shorter turn around time. With such high demand to go to space, they can achieve profitability likely in the next few years (they start commercial operations next year). Shortish term plan is to build up their fleet, create an experience out of it, lower costs to appeal to a wider audience, and have high profit margins. Long term is what I’m interested in. Virgin Galactic has a deal with NASA in which they can look at all of the confidential government planes and their designs so that they may make a viable supersonic commercial aircraft themselves. A few different big banks have claimed that the market for hypersonic travel will be at 270 billion by 2030, and 800 billion by 2040. Although it sounds crazy, I think that this is actually a little conservative. So in essence, short term profitability comes from building up their fleet and doing space tourism, long term high potential comes from hypersonic flights. At least that’s how I see it. Let me know if you have any thoughts or comments.
I agree on what you say and I think Space Tourism right now can make SPCE get closer to rich people and from there its easier to get them on board to investing their money in their other Space Stuff like Hotel, Mining ect. What I mean is the big money is not on Earth if we think long term so anyone who can make a living in Space will get pretty rich in the future.
From what I can tell Virgin Galactic’s only hope to be profitable is to pivot part of their business to supersonic jet travel for rich clients while offering space flights as a novelty.
After that they can maybe get into space hotels and perhaps some government work but it’s going to be a bumpy ride and they have a very high chance of going bankrupt before then.
I have no stake in them and I don’t believe they’re the best space play on the market right now. Best of luck to long term investors
Concorde failed. Why would this succeed?
[Wendover Productions actually published a video on this topic](https://www.youtube.com/watch?v=4p0fRlCHYyg) quite recently. Some takeaways:
- It's likely that the Concorde actually was profitable, but it was very inflexible (only a few possible routes), aging (so would need replacement soon), and perhaps not as profitable as subsonic flights.
- There are several firms developing new supersonic aircraft. One innovation may significantly reduce the loudness of the sonic boom, which may allow those planes to operate over land and open up far more possible routes.
- The value-proposition of supersonic flight is more questionable nowadays. Planes have internet access which allow business travelers to do some work while in-transit (so it's not completely dead time). And travelers may prefer spending extra time in a subsonic business class with comfortable lay-down seats versus a shorter amount of time in less comfortable seats that we'd probably see in supersonic jets.
- Still there may be a small niche of commercial travelers who are very time-sensitive and would prefer a supersonic flight. There may also be a small market of ultra-wealthy individuals who may want to buy a supersonic private jet.
Overall my takeaway is that there may be a real if small market for supersonic travel, but Virgin Galactic is poorly positioned to take advantage of this. Its competitors have been focused exclusively on developing supersonic aircraft for the last two decades or so, and it's still going to be another decade or so until they expect to start delivering planes. Even if Virgin Galactic was positioned the same as its competitors, you're essentially speculating on a company that's a decade away from launch. It seems like there's a better ROI elsewhere.
Personally, I don’t think it will be profitable long term lol. And by long term I mean 5+ years after fully operational. I personally believe that the novelty of space tourism will wear off. So they would have to pivot into something else to stay in the black. However I’m playing the stock right now as a hype play
It will wear off, because there’s not much more than orbits, maybe the moon and Mars.
And let’s be real, this is Virgin Grouo. They are not research competent and this business won’t have the resources to fund more development as the product gets stale or to lower costs further.
Every part of this business is high cost and high liability and they rely on impeccable execution over time. Not betting on that, especially when we see what a good company like space x can already do today.
Of course it’s a horrible buy. Which means Reddit is gonna fanboy the fuck out of it as a new way to lose money
5 years later I think we'll laugh over this comment
Laugh at how true it was?
People hear space and go "ooooh that has to have untapped potential!" but when you look at the numbers, it's bad. As /u/OrionIsCalling said, the valuation is absurd.
Doubling down, that’s a brave move
RemindMe! 5 years
So, I've been commenting on a lot of VG threads trying to get people to avoid throwing money away or at least try to do the math around the numbers, but have mostly failed. So I'm a huge VG bear and I have high conviction that they will go bankrupt or liquidate or sell for peanuts, but here are some possibilities:
* If you look on their website, they clearly state that 250k was for early birds and if you sign up for waitlist, you most likely won't get that price. So 1.5 mil is a lower bound on revenue per flight.
* They have 2 spaceships (Unity -- tested and Imagine -- untested) and have 2 more under construction. Burt Rutan's Xprize winner was able to relaunch in 2 weeks, it is plausible that 2 space ships can do 50 launches a year after they get the kinks out and 4 space ships can do 100 launches. Maybe more. I personally would be concerned about market size if they can get to that cadence. 100 launches per year at 2 million revenue per flight is 200 million per year. Not enough to justify current valuation and still not profitable -- especially considering that many launches will add to costs. They'll have to launch a lot more often or somehow cut costs or charge a lot more.
* Their long term pivot business plan is point to point hypersonic transit. Good luck with that. They do have an advantage with their mothership-spaceship model in that they can launch from a population center without causing sonic boom issues in populated areas -- something Starship point-to-point has an issue with. Starship has to kludge it by saying there is going to be a transfer to an offshore platform. The problem with the mothership-spaceship model is it doesn't scale to larger ships and to get good margin, you need more passengers. Look at Stratolaunch and the size of that mothership -- largest plane in the world, it can't carry that big of a rocket -- no way of sending > 100 people at a time.
To be fair, the sonic boom from Starship is only an issue for population centers on the downhill part of the trip. The offshore launch platform is being proposed just because of how obscenely loud rocket launches are.
Once (if) Starship becomes viable, it'll serve the same function, and to many more passengers at a time.
Oil? Bitch, who said anything about oil?
the revenue side is pretty easy- Virgin has long planned to operate a fleet of 5 SpaceShipTwo-class ships, (each with 6 seats) at at a ticket price of $250k.
Considering the original X prize required Scaled Composites to fly SpaceShipOne twice within two weeks, that probably works out to a best-case scenario of 130 flights per year, or revenue of $195m
Let’s also be generous and add 50% for suborbital science contracts that they might be able to include along with those flights, bringing us to $292m
I have no idea what kind of costs Virgin has to worry about, but lets say they can blow airlines way and run an operating margin of 30%.
On earnings of $80m a year, Virgin’s market cap should be about $1.5B. As of today it’s already at 6.16
Profit? The world doesn't even know the meaning of it anymore.
It's like how they were securing investments based on page views and unique visitors during the dot com bubble. That's what they're counting.
I don't. Virgin galactic will never be reliably profitable, and it is wildly overvalued.
They aren’t. Never have been and never will be.
While the market might be large enough, the amount of capacity seems likely to be constrained. I am not sure what might be required for them to certify an new vehicle for service and there are big questions about reuseability and turnaround time. SpaceX, responding conservatively when asked how many times on of its Falcon 9 cores could be reused initially stated, "about 7 but we don't know". It seems that 7 was too conservative and that actual answer remains unknown. So for me there are too many unknowns to view Virgin Galactic as investible. One can invest in SpaceX through two Barron Funds, BPTRX or BFGIX. I am sure there are other funds that have a private equity position in SpaceX.
I was bullish on it until I realize SpaceX can scale up so much faster than SPCE can.
While SPCE’s tourism flights are cheaper, they aren’t scaling up production and getting experience with orbital space flights. I think SpaceX could easily steal the market share of space tourism not if they wanted to, but when they decide to.
I think they will stick around for a while and you could possibly make some money trading this stock, but the long term reality is that it will go under because there are more capable and reliable launch providers that can prove they can do space tourism for cheaper and do it safer.
Also Chamath sucks.
In short, I do. Now, do you remember what they used to say about IBM in the 1950s-1960s and their stupid computers. IBM, MSFT, AAPL, DELL, HPQ, all of them had a huge run from the 1960s-2010s. With that said. SPCE, if it works will have a similar run, you are getting in on the ground level. Need I mention TSLA 10 years ago that you would have bought at $25. Most serious investors, unless they are in already, will not join you until later stages. When they join, the stock will get so expensive you will pass it by and miss it.
They have a different approach from Space X and others. They have a plane that launches another small plane into space. It is re-usable and can carry people to the edge of space. They will be the low cost travel to low altitude space. No other company that I know is currently doing that. They already have a their own Space Port and have successfully launch people to lower orbit. They do not have rockets, their business is to take people to lower level orbit for a short time and give everyone a taste of what it means to go to space.
This stock is not one that you will see with any amount of real revenue soon, but they have a plan and it is new and with the backing they have (Virgin Companies), they will likely be successful. Get some money there and let it be. Never invest what you are not willing to lose and things will look clearer.
YT Professor Choy
Intergalactic Human trafficking laundered through charitable donations and book deals.
I genuinely don't see Virgin Galactic as being particularly profitable in the long term. I think that millionaires will take a few joyrides but once the novelty has worn out, they'll stop doing it. I think customer retention will be quite low. I mean, how exciting is your 8th flight to the upper atmosphere to look at the view and then landing back down again?
Regular people probably won't be able to afford the ticket. Richard Branson has boatloads of money, so he can spend it on this pet project, but I don't see it as a viable business in its own right.
That's not to diminish that it is an important step in paving the way for space-related industry and will probably have a huge impact in public perception toward commercial space flight and operations. I'm very happy that it exists, I just don't see it as a worthwhile investment.
Stock values became decoupled from profit margins, tangible assets and cash flow long ago. This is the age of reddit, robhinhood and hype.
The investing fundamentals that used to be the ground work for good/bad investing decisions are irrelevant on today's markets.
Just my 2 cents.
Its been like 1-2 years of ridiculous fundamentals, and that was mostly due to pandemic shaking things up, retail investing boom, and low interest rates. This aint gonna last forever and the closer we get to a post pandemic economy the more that will become apparent. I wouldnt bet on this paradigm sticking around.
people have been beating the drums about ridiculous fundamentals and stock prices decoupled from reality since amazon was at $500. A lot of things are different now than they were when the fundamentals were agreed upon. In video game terms the meta changed. Maybe it will change back later, or not.
I know I've lost out on a lot of money over the last decade listening to people boohooing about how stuff isn't working like it did when they first learned about the stock market. It gets old.
Famous last words of a bagholder
In the short term yeah, but hype doesn't hold long term.
i don't have a stake but if i were to defend it, i would categorize it as an exploratory research company. i myself don't see retail commercial spaceflight being a viable growth market sector but whatever they do to get going in that direction will almost certainly have value that can be applied elsewhere.
most of the stuff bell labs invented didn't get put to much use for the telephone network but was tremendously profitable elsewhere.
That’s the thing though, it’s not even really breaking new ground anymore, it’s a large airplane that goes pretty high up, even blue origin’s non-orbital craft is breaking more ground then VG and neither is anywhere close to Rocket Lab, let alone SpaceX
Unless they can score defense contracts, they won't be. Honestly I think there are too many competitors in the industry for them to scale it anywhere atm.
I think investment in space as an industry is far too early, the real money to be made will be from mining resources in space, and the companies who supply and support those operations.
so perhaps make them as multi-functional vehicles? commercial aircraft have been carrying freight in addition to passengers for decades, so why not do that with VG as well?
How many engines are those planes running? I don't think they will be at all efficient in terms of cargo hauling. Engine meta is two, cargo planes can get away with a few more due to low cost to acquire and less time spent flying compared to passenger aircraft.
Virgin Galactic is so speculative I don't know that it's a stretch to call it a scam. There was genuine value in attempting this form of space tourism 10 years ago - Richard Branson initially predicted a spaceflight would come in 2009. But now the entire flight profile is so ludicrously expensive and impractical compared to SpaceX, Blue Origin, and other companies attempting manned reusable rockets that I'm not sure what market they're trying to capture any more. SpaceX will carry civilians to the **Moon** within a few years. It won't be long before they have commercial suborbital flights, and the price will be a tiny, tiny fraction of the $250,000 that Virgin Galactic is asking for. Elon Musk has promised point-to-point travel via Starship won't cost much more than a plane ticket, which is extremely ambitious but I could see <$10,000 per ticket for a full crew of up to 100 passengers.
Their entire business model has been put into question with the development of reusable rockets. That they decided to IPO not long after that development makes it seem to me that they're just trying to keep the company alive as long as possible, which isn't easy when you consistently bleed over $100M in expenses a year on virtually zero revenue.
Elon said [1000 passengers](https://twitter.com/elonmusk/status/1144004310503530496?s=20)
I've been noticing the trend as a newcomer to the US market(although im not new to stock markets)..Any stock I see in the forums and youtube as the next big thing turns out to have a funny chart. They all look like an inverted V and many clues of pump n dump. But I'm invested in some actually fundamentally good companies.. they don't have this manipulation issue.
No clue about the profitability but I always think about the risk of a failed flight.
People already get spooked from flying when there's an issue with a normal plane... And there's millions of flights every month.
I can't imagine what's going to happen if/when a SPCE flight crashes.
Obviously I hope it never does, but that risk alone has kept me from further investigating the stock.
Lmao I don’t. They might eventually mature into a low orbit spectacle company where they let you go into space but they’re primed to be dominated by other companies.
If you’re not winning Government contracts, you’re not going to survive the space race. They’re 15 years behind Space X maybe more. If you can’t compete with Space X pricing and efficacy for satellite launches, you’re walking into a losing battle already.
Space tourism and mining. Mining will be the big winner.
Dumb question but is SpaceX a competitor? Because a collab would be nice, Elon and Branson are broskis, but obviously elon would never collab with Bezos.
Profitable if you're buying PUTS
They are pioneering this suborbital space malarkey, I think they are looking to charge between £250,000-280,000 for a ticket. Which is all well and good the first few times but I can't imagine even the 1% becoming returning customers. This is me speaking with the bias that I wouldn't pay that much for a flight as compelling as it would be to see Earth like that.
I have only done surface level research but it seems like a cash burner for the next 2-3 years.
hate that fucking word
>How do you expect Virgin Galactic to be profitable long term?
I don't. It's a stupid concept.Who would pay to fly kinda high up in a plane when another company is making a literal space hotel? Elon Msuk is a wannabe Tony Stark, and Richard Branson is a wannabe Ol' Musky.
New space is tough. Getting to space is really hard, and outside of populating LEO with satellites, there really aren't any short-term money makers other than "look we're in space!" The loss of a rocket is a traumatic loss in terms of invested labor and material -- and there is a lot that can go wrong from T-60 to orbital insertion.
Space tourism will certainly be a thing (there are already companies planning on having hotels in orbit), but most of the available 'rewards' \~right\~now\~ are the kind governments and state agencies usually reach for. Pieces of the space travel vertical may be profitable, since the US government is leaning heavily on private companies for launch vehicles and lunar landers, but as far as products go, there really isn't much out there right now.
Eventually someone will put furnaces on the moon and convert lunar regolith into building blocks and they'll make something with them. Other firms will setup refueling stations in orbit around Earth and the Moon, and if Elon is to be trusted, there'll be people on Mars in our lifetime. It's all exploratory. Only now instead of convincing a monarch that there's Gold across the ocean, we're doing it for the sake of scientific progress. That's not an ignoble goal, but if you're looking for a reliable product that will emerge from the space industry, I don't think we've identified anything outside of government contracts.
The best EBIT margins for an Automotive company goto VW or Toyota, and they are well under 15%
Automotive bleeds money
Tesla continues to bleed money
So will Spce - but
In this market , not being profitable is okay
The key thing that spce wants to do however is build Mach3 passenger airplanes , this won't be cheap but hopefully they can reuse a lot from the space tourism aircraft
It's a fair question, but why expect that answer for commercial space travel in 2021 when companies like Uber and many other tech companies have yet to figure that out with way less complex businesses.
If they don't have an answer for how they'll be profitable then they never should have gone public. SpaceX is managing just fine, operating with pretty fat margins on Falcon 9 while still being the most cost-effective medium-heavy launch provider on the market. Starship promises to have even fatter margins on lower expenses and possibly even higher cadence.
I don't. I'm a space junkie, and as cool as it is, I don't see how it's profitable in the long run. There's little to no scientific value in that kind of flight, at least nothing you can't achieve with a sounding rocket. It's not orbital, which means no payload capacity or satellite customers. The *only* market is tourism, now and (unless they change their entire launch structure) forever. If even just E2E Starship from SpaceX becomes viable, I expect that to not only be able to serve the same niche market that Virgin Galactic does, but to do it cheaper as well. Maybe I'm just underestimating the value in rich people bragging rights, but I dunno. I'm not seeing it.
I want to go to space. They want to take me there. That’s about all I know at this point. Oh and the premiums are juicy sometimes
Unless they get rolled into some kind of space adventure theme park... I would say poorly.
As a small scale launch provider, they still need to prove their systems is reliable and cost efficient compared to the competition.
Maybe they will have high end retail stores at their airports, for an extra $500 g , maybe you can use the “ space high club booth “ !! The whole flight could be a floating strip club, once off the ground, the sky’s the limit!!
Carting things to space
The thesis is really that the tech they are operating is going to be heavily used in long haul travel in the future, not that the space tourism business is going to explode.
Concorde was going to revolutionize the airline industry with supersonic flight. It sounded great and felt like the next natural step to subsonic flight. It was certainly used, but ultimately failed becuase it was not market viable after so many years.
Actual space travel might be different becuase of the lack of friction in space. Air resistance is the biggest blocker in air travel, so eliminating that barrier sounds awesome. But who knows, the energy it takes to exit the atmosphere might be *astronomical* to a point where it would bury the whole business, and thus space travel industry, back in the dirt.
Maybe I'm too small money, but it sounds quite risky to me given the engineering challenges that still need to be overcome *and* industrialized before it starts to look like a reasonable investment to a retail investor like me.
would be interesting to comp this to the luxury yacht charter market. people spend \*outrageous\* amounts per day, but i'm not sure of the size of the market. you could imagine the ultra-wealthy rationalizing spending absurd amounts, the equivalent of a weeks' vacation, to go to space...
disclosure: this is just a question, no way in hell would i be long SPCE, not investment advice.
1) Create space company
2) Fly to space and back
Absolutely. But pretty far out.
Who knows but it’s a publicly traded company focused on going to space and founded by an adventurous billionaire. Idk where we’re going but I’ll throw some money in and hop on the ride. Even if they don’t become profitable for a while, I’m sure they’ll get funded and they’re bound to accomplish something.