Ben Gilbert: uncertainty

Transcript context

…The first of many. In July of 2008, Branson predicts the first passenger flight will happen within 18 months. Then not almost quite 18 months go by in October of 2009, Virgin puts out a press release saying that actually it’ll be within 2 years from then. Within two years of 2009 and in March of 2010, actually the first SpaceShipTwo is built, the first White Knight Two is built at this point, and the first captive flights of the two of them up in the air together do start happening in early 2010. But SpaceShipTwo is not yet flying on its own. Despite Virgin and Sir Branson having put in $100 million, the project is starting to run out of money. In 2009, they go to the sovereign wealth fund of Abu Dhabi and they invest $280 million in Virgin Galactic, which had an $875 million valuation. Part of that deal is that they announce plans that a Middle East region spaceport is going to be built in Abu Dhabi. That’ll be great. And Virgin announces at that time that they have over 300 reservations at $200,000 each. Great. Things are moving along. Definitely signs of demand. One other classic Acquired theme that I’ll pull out here is this $875 million valuation, I don’t know what discounted cash flow you do to arrive at this company being worth that. This is your classic example of a company needing X amount of dollars and how much of the company does the funder need to own in order to be willing to do that deal. It is backed into valuation, if I’ve ever seen one. You might say venture capital style valuation, a theme that’ll come back up in a minute here. At the end of 2009, they do a big event at the Mojave Space Port in California where Scaled is based. They unveil officially the SpaceShipTwo. Branson says at the event, the flights are going to begin now in 2011. 2011 rolls around. Branson says, I hope that 18 months from now, we’ll be sitting on a spaceship and going to space. The trend continues. As we mentioned, in April 2011, Burt does retire from Scaled. Clearly, things are not totally on track here. Remember, Burt’s now retiring from Scaled, Virgin is the space line, but who’s the technical space leadership now? They end up re-orging the entire organization. Branson brings in a new CEO, the Virgin Galactic—actually at the end of 2010—George Whitesides. Now, who is George Whitesides? A part of his background is that he was actually one of the very first people to purchase a ticket on Virgin Galactic as soon as they went on sale. He has recently gotten married and he and his wife wanted to spend their honeymoon in space. They actually got a lot of publicity around this.…

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