Richard Branson’s Virgin Galactic takes off in NYSE debut

(Reuters) – Richard Branson-backed Virgin Galactic Holdings Inc (SPCE.N) started trading on the New York Stock Exchange on Monday, becoming the first space tourism company to hit public markets.

The stock opened at $12.01.

The company was created from the merger between British billionaire Branson’s Virgin Galactic and former Facebook executive Chamath Palihapitiya’s publicly-traded shell company, which invested $800 million for a 49% stake.

Merging with an already-public company allowed Branson’s space venture to sidestep the traditional initial public offering process, including filing extensive paperwork with the U.S. SEC.

The listing comes during a dry spell for IPOs following failed attempts including office-share startup The We Company and disappointing debuts such as fitness startup Peloton Interactive Inc (PTON.O).

Branson, with a 51% stake, retains control of the company which had a market cap of $2.3 billion following the announcement of the merger completion on Friday. Palihapitiya is chairman of the combined company.

Branson is racing against competitors Blue Origin, the space business of Amazon.com Inc (AMZN.O) founder Jeff Bezos, and Elon Musk’s SpaceX to bring tourists into space.

Hundreds of people from 60 countries, including actor Leonardo DiCaprio and pop star Justin Bieber, have paid or put down deposits to fly on one of Virgin’s suborbital flights.

Some of Virgin Galactic’s ticket holders have been waiting over 14 years for their trip. A 90-minute flight, which allows passengers to experience a few minutes of weightlessness, costs about $250,000.

Virgin’s current reservations represent about $80 million in total collected deposits and $120 million of potential revenue.

The company has attracted a $20 million investment from Boeing Co (BA.N) to commercialize space. Earlier this month, the company announced spacewear for passengers developed in collaboration with sportswear maker Under Armour Inc (UAA.N).