David Rosenthal: belief

Transcript context

…We've pretty much danced around narratives, but I think it's worth specifically articulating what the bull and bear cases are around the company. The bull case is that SPACs actually are incredible vehicles to finance these long-term capital intensive projects. What they were used for before was bringing crappy companies to market and they deserve the reputation that they had. The vehicle itself not having to do a roadshow and actually consummating a transaction with one buyer who has done a ton of research on your company brings a ton of capital all at once to bear. It's actually an awesome way to raise a good amount of money, to provide the right amount of liquidity to shareholders and to only need that one party that believes in your long-term vision and is willing to get you public to allow any future investor to make a moonshot bet. Whereas the traditional IPO process, it would be really hard to run the traditional book making process on Virgin Galactic. It had never made a dollar or a material dollar before. Well, still basically never. It was really hard to estimate when that would start happening, when it would turn a corner. It’s really hard to estimate how much future capital would be required. You can make a projection but how much is any retail investor going to believe that? You sort of risk going public and then the whole business dying based on trading down immediately or based on being able to not subscribe to the offering, whereas in a SPAC, you really just need that one true believer. Well, that one true believe it and it's at a negotiated price. I think that's an important piece of upgrade here which is the SPAC vehicle but the insider as of the SPAC and the SPAC shareholders acquired 50% of the company. Right, it’s a pretty dilutive financing.…

Stored transcript either side of the excerpt. The highlighted words are the published quote; the surrounding text is unedited source, never generated.