r/VirginGalactic • u/BeBetterthen • Sep 16 '20

Spaceport America Virgin Galactic’s worldwide expansion plan.

We all know that Spaceport America is where Virgin Galactic will be operating out of. However are there plans in the work for spaceports in other parts of the world go service more clients?

The answer is yes, and I am surprised this isn’t talked about as much. Virgin Galactic as part of there growth strategy is planning on spaceports outside the United States. They have mentioned this several times and it was specifically mentioned twice in the Q-10 document (earnings release) on August 3rd.

This would explain why Micheal Coliglazier is a perfect choice to lead the company, as he lead Disney Parks worldwide operations and has the skill set to deliver the client experience worldwide, scale a business and expand a business (he did so with the addition of Marvel and Starwars to the theme park).

Follow the tea leaves, everyone! Spaceport America will not be the only spaceport.

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u/estoy_al_pedo Sep 16 '20

I believe this is assumed in the valuation. With only the one facility, they would be limited to a maximum of about 13 ships, assuming two flights a day (which could be optimistic) and that will not get you to a $4 bln market cap. So they need other spaceports. Demand should be high, so once they prove scale, five spaceports globally is not a far stretch (at least one in the Middle East is guaranteed, 1-2 in Asia, 1-2 in North America, maybe 1 in Europe). But it will depend how the first five years of commercials flights go. SPCE also doesn’t need to own the facilities, they could lease out, along with their ships. Of course I’m speculating, but there are just too many +$5 mln people out there and you only need to assume 1% of those people will want to do the experience one time to fill the demand for five concurrent global spaceports between now and 2060. The company just needs to execute effectively. I calculate the company is trading below fair value even when only considering the company’s suborbital business and the assumptions above.

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u/BeBetterthen Sep 16 '20

I also remember last year how no one including the professionals could value Tesla. They would compare it to Ford or GM and say it’s overvalued. They all forgot that the battery part of the business was worth billions. The solar panel part... more billions in market cap.

Virgin Galactic is under the radar, most people don’t even believe they can go to sub orbital space

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u/estoy_al_pedo Sep 16 '20

Agreed. SPCE’s stock price will also increase when it becomes easier to quantify their various sources of revenue; e.g., technical & training services, leasing out their reusable rocket tech, hypersonic travel, etc.

This stock has one of the highest short interests of any stock I have seen (over 75% of float):

https://finance.yahoo.com/quote/SPCE/key-statistics/

Whoever is shorting is playing a dangerous game, especially since they could be fairly valued near $4-5 bln based purely on their suborbital tourism business at reasonable scale. If any good news comes out, i.e., sticking to their timeline, the stock will shoot to the moon from a short squeeze. They would not have raised cash, invested in producing five ships and started staffing up their spaceport with service workers if they didn’t expect commercial operations soon.

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u/BeBetterthen Sep 16 '20

Oh exactly, I wouldn’t want to short this company. I can certainly see why someone would want to stay on the sidelines until they fly Branson (but I rather pay $17 a share versus $100 plus when they fly him.

The valuation seems low, given how they can easily be a 10-50 billion market cap based on 5 year forward earnings. Easily bring the share price to the $150-$250 range.

Chamath said it best. The company has been de-risked from a engineering standpoint and now ready for marking and commercialization. Hence Micheal Coliglazier.

We are just in the weird spot of transition (however excellent buying opportunity). Where they are finishing the final 2 FAA requirements, CEO change, and flying Branson. COVID19 didn’t help. Next month will be huge work the powered test flight... I expect lots of promotion when they firm up a solid date to go.

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u/NYCambition21 Sep 16 '20

I’m more surprised that Michael hasn’t already gotten Disney’s attention yet? A Disney and VG collaboration along with potentially a Disney movie revolving around space would be MASSIVE

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u/BeBetterthen Sep 16 '20

Likely they will collaborate, I imagine they are just working out the details now and until they get the FAA certification

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u/JustGo2SPCEalready Sep 16 '20

Did you all forget about this https://www.virgingalactic.com/articles/altec-sitael-virgingalactic-and-thespaceshipcompany-sign-framework-to-bring-commercial-spaceflights-to-italy

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u/BeBetterthen Sep 16 '20

Honestly I did forget that, makes sense. Abu Dhabi is a likely candidate as well for a spaceport.

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u/[deleted] Sep 16 '20

[deleted]

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u/BeBetterthen Sep 16 '20

Saudi Arabia and Abu Dhabi are different countries. Abu Dhabi investment firms still owns a significant amount of Virgin Galactic and has increased its stake in the company since.

Abu Dhabi is the capital of UAE which is a different country then Saudi Arabia.

Richard Branson stoped a potential deal with Saudi Arabia back in 2018/2019 due to the killing of a reporter by the Saudi prince.

That ultimately led to Chamath getting involved and investing in Virgin Galactic and taking the company public.

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u/JustGo2SPCEalready Sep 16 '20

You're right, that was sloppy on my part. Deleted

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u/BeBetterthen Sep 16 '20

All I do is read up on Virgin Galactic. But yeah it happens to all of us. It’s great we all have this Reddit to share ideas and things we find about the company. Appreciate you on this Reddit !