Close Menu
TechCentralTechCentral

    Subscribe to the newsletter

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    Facebook X (Twitter) YouTube LinkedIn
    WhatsApp Facebook X (Twitter) LinkedIn YouTube
    TechCentralTechCentral
    • News

      World Bank set to back South Africa’s big energy grid roll-out

      20 June 2025

      The algorithm will sing now: why musicians should be worried about AI

      20 June 2025

      Sita hits back at critics, promises faster, automated procurement

      20 June 2025

      The transatlantic race to create the first television

      20 June 2025

      Listed: All the MVNOs in South Africa – 2025 edition

      19 June 2025
    • World

      Watch | Starship rocket explodes in setback to Musk’s Mars mission

      19 June 2025

      Trump Mobile dials into politics, profit and patriarchy

      17 June 2025

      Samsung plots health data hub to link users and doctors in real time

      17 June 2025

      Beijing’s chip champions blacklisted by Taiwan

      16 June 2025

      China is behind in AI chips – but for how much longer?

      13 June 2025
    • In-depth

      Meta bets $72-billion on AI – and investors love it

      17 June 2025

      MultiChoice may unbundle SuperSport from DStv

      12 June 2025

      Grok promised bias-free chat. Then came the edits

      2 June 2025

      Digital fortress: We go inside JB5, Teraco’s giant new AI-ready data centre

      30 May 2025

      Sam Altman and Jony Ive’s big bet to out-Apple Apple

      22 May 2025
    • TCS

      TCS+ | AfriGIS’s Helen Hulett on how tech can help resolve South Africa’s water crisis

      18 June 2025

      TechCentral Nexus S0E2: South Africa’s digital battlefield

      16 June 2025

      TechCentral Nexus S0E1: Starlink, BEE and a new leader at Vodacom

      8 June 2025

      TCS+ | The future of mobile money, with MTN’s Kagiso Mothibi

      6 June 2025

      TCS+ | AI is more than hype: Workday execs unpack real human impact

      4 June 2025
    • Opinion

      South Africa pioneered drone laws a decade ago – now it must catch up

      17 June 2025

      AI and the future of ICT distribution

      16 June 2025

      Singapore soared – why can’t we? Lessons South Africa refuses to learn

      13 June 2025

      Beyond the box: why IT distribution depends on real partnerships

      2 June 2025

      South Africa’s next crisis? Being offline in an AI-driven world

      2 June 2025
    • Company Hubs
      • Africa Data Centres
      • AfriGIS
      • Altron Digital Business
      • Altron Document Solutions
      • Altron Group
      • Arctic Wolf
      • AvertITD
      • Braintree
      • CallMiner
      • CYBER1 Solutions
      • Digicloud Africa
      • Digimune
      • Domains.co.za
      • ESET
      • Euphoria Telecom
      • Incredible Business
      • iONLINE
      • Iris Network Systems
      • LSD Open
      • NEC XON
      • Network Platforms
      • Next DLP
      • Ovations
      • Paracon
      • Paratus
      • Q-KON
      • SevenC
      • SkyWire
      • Solid8 Technologies
      • Telit Cinterion
      • Tenable
      • Vertiv
      • Videri Digital
      • Wipro
      • Workday
    • Sections
      • AI and machine learning
      • Banking
      • Broadcasting and Media
      • Cloud services
      • Contact centres and CX
      • Cryptocurrencies
      • Education and skills
      • Electronics and hardware
      • Energy and sustainability
      • Enterprise software
      • Fintech
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Lifestyle
      • Motoring
      • Public sector
      • Retail and e-commerce
      • Science
      • SMEs and start-ups
      • Social media
      • Talent and leadership
      • Telecoms
    • Events
    • Advertise
    TechCentralTechCentral
    Home » World » Richard Branson is outgunned in billionaire space race

    Richard Branson is outgunned in billionaire space race

    By Agency Staff11 May 2021
    Twitter LinkedIn Facebook WhatsApp Email Telegram Copy Link
    News Alerts
    WhatsApp
    Richard Branson. Image: Virgin Galactic

    Becoming a public company brings much more scrutiny, and placating investors is doubly difficult when a business isn’t yet generating meaningful revenue. Imagine, though, being a novice listed business trying to complete a suborbital space-travel test programme in the midst of a global pandemic while two of the world’s richest people, Elon Musk and Jeff Bezos, are busy advancing their own rocket endeavours. This is the competitive pressure on Virgin Galactic. No wonder it’s wilting.

    On Monday evening, Richard Branson’s space tourism venture said it was reviewing the timing of its next flight test after discovering unspecified “fatigue and stress” on the aeroplane used to carry the spacecraft aloft. It will know next week whether this means yet another delay to the billionaire’s 17-year quest to carry paying passengers to suborbital space. The shares fell 8.5% in regular trading.

    While Branson’s ambition — and the bravery of his pilots — is admirable, the stock market tends to think in quarters not light years. With more than US$600-million of cash on hand, Virgin Galactic doesn’t face an immediate shortage. But Branson is reducing his stake, reliability issues are a concern and new spaceship investments are pending. The company doesn’t look well enough equipped to hold its own against Musk and Bezos.

    Virgin Galactic has appointed a new CEO, chief financial officer and head of engineering in the past 12 months

    Virgin Galactic’s stock almost trebled at the start of the year, helped by Cathie Wood’s Ark Investment announcing a space-themed ETF. But the Robinhood crowd have since retreated as the markets have rotated out of unprofitable tech stocks. The company’s share price decline since a February peak is poised to exceed 70%, although the stock is still far higher than the $10 price at which Branson agreed to take the business public in 2019 — by merging it with Chamath Palihapitiya’s special purpose acquisition vehicle, Social Capital Hedosophia.

    Safety lapses

    Virgin Galactic hasn’t conducted a successful space flight since early 2019. A new book has shed more light on the delay-plagued test programme, including worrying safety lapses in 2019. Virgin Galactic declined to comment on why these issues weren’t previously disclosed to investors.

    When it joined the stock exchange in 2019, it predicted commercial services would begin the following year. The first paying customer won’t now fly until 2022. Analysts have had to continually revise lower their sales expectations, compared to the financials Virgin touted during the SPAC merger. It’s another reminder why the financial projections that SPACs are permitted to publish shouldn’t be relied upon.

    Virgin Galactic has appointed a new CEO, chief financial officer and head of engineering in the past 12 months. Given the technical issues, it’s hard to have confidence in its plans to offer multiple daily flights, or in its ambitions to develop hypersonic aircraft for international travel.

    Virgin Galactic’s SpaceShipTwo during its third powered flight

    Branson’s company took advantage of its buoyant share price by tapping investors for an additional $460-million last year. It still looks like the poor relation: Musk’s SpaceX has raised billions of dollars of private funding and Bezos sells about $1-billion of Amazon stock yearly to fund his space ambitions.

    In contrast, Branson has sold his space stock to fund his terrestrial interests. His latest $150-million Virgin Galactic stock sale cut his stake to 24% and brought the total that Virgin Group-controlled entities have cashed out since 2019 to roughly $1-billion — similar to his total investment in the company. (This calculation includes the money a Virgin Group-controlled entity cashed out at the time of the SPAC merger, the shares sold to Palihapitiya, proceeds from share repurchases and the stock sales in 2020 and this year. A Virgin spokesman was unable to confirm this calculation and referred to the company’s financial disclosures.)

    Palihapitiya netted more than $300-million by exiting personal holdings, recouping treble his initial investment. He still has indirect exposure via Social Capital Hedosophia’s roughly 7% stake.

    Bezos’s Blue Origin plans to launch its first crewed mission in July and has generated huge publicity by auctioning a seat

    Both men say they need the money for other things: Branson to support his pandemic-hit travel businesses, and Palihapitiya to help pay for a new investment. It’s a bad look for two major shareholders to sell so much before Virgin Galactic has completed flight testing or received Federal Aviation Administration approval.

    The ambition of becoming the first suborbital space tourism company is now in jeopardy. Bezos’s Blue Origin plans to launch its first crewed mission in July and has generated huge publicity by auctioning a seat. SpaceX is already carrying astronauts to the International Space Station and has a $2.9-billion Nasa contract to help land people on the moon.

    Something else separating these tycoons is that Bezos and Musk favour vertical takeoff and landing rockets, while Branson has bet on aircraft-based, horizontal takeoff and landing (a carrier jet releases the rocket-powered spacecraft at about 13.7km above the planet). Investors hoped this unique technological approach would prove easier to execute. The latest setback may have them thinking otherwise.  — By Chris Bryant, (c) 2021 Bloomberg LP



    Amazon Blue Origin Elon Musk Jeff Bezos Nasa Richard Branson SpaceX top Virgin Galactic
    Subscribe to TechCentral Subscribe to TechCentral
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email Copy Link
    Previous ArticleFNB opens banking API to Sage platforms
    Next Article Helios Towers eyes South Africa after R8-billion Oman deal

    Related Posts

    Watch | Starship rocket explodes in setback to Musk’s Mars mission

    19 June 2025

    Starlink to South Africa: ‘We are ready to invest’

    17 June 2025

    Up to Icasa whether Starlink gets a licence: Malatsi

    11 June 2025
    Company News

    Making IT happen: how Trade Link gears up to enable SA retail strategies

    20 June 2025

    Why parents choose CambriLearn for online education

    19 June 2025

    Disrupt first, ask questions later – the uncomfortable truth about incident response

    18 June 2025
    Opinion

    South Africa pioneered drone laws a decade ago – now it must catch up

    17 June 2025

    AI and the future of ICT distribution

    16 June 2025

    Singapore soared – why can’t we? Lessons South Africa refuses to learn

    13 June 2025

    Subscribe to Updates

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    © 2009 - 2025 NewsCentral Media

    Type above and press Enter to search. Press Esc to cancel.