|SPCE||VIRGIN GALACTIC HOLDINGS INC.||29.58||-1.24||-4.02%|
"Honestly this is sticking your finger in the wind," Tusk Holdings CEO Bradley Tusk told FOX Business when asked how to value the company.
He added Virgin Galactic could be "one of the most interesting and important companies of the next 25 or 50 years," or that it may never turn a profit, in which case whatever you pay now will be "wildly overpriced."
Virgin Galactic on Monday became the latest money-losing company to go public in 2019. The ride-sharing companies Uber and Lyft, the software company Slack and the home-exercise company Peloton have all seen their share prices slump in the wake of their stock-market debuts. The plant-based burger maker Beyond Meat saw shares surge by as much as 421 percent in the months following its initial public offering, but has since trimmed its gain to 119 percent as of Friday's close.
A direct listing is different from a traditional IPO in several ways. By going public through a direct listing, Virgin’s shares don’t have a set price or supply when they hit the market and the company avoids having to pay potentially hundreds of millions of dollars in fees.
For investors, it means there’s no lock-up period preventing the sale of shares. It also means the likelihood of higher volatility, at least in the near term, amid the process of price discovery.
Virgin Galactic's merger with the venture capitalist Chamath Palihapitiya’s Social Capital Hedosophia was approved on Wednesday, paving the way for Monday’s stock-market debut. The deal left Branson with a 51 percent stake in the company, while giving Social Capital Hedosophia the remaining 49 percent.
A ticket to the final frontier costs $250,000. The company has sold about 600.
Virgin Galactic shares trade under the ticker SPCE.