How to Buy Virgin Galactic Shares Online in the UK

Launched in 2004 – Virgin Galactic is a futuristic innovator that plans to introduce ‘tourist flights’ to outer space.

The company is still at the very start of its technological journey and thus – is yet to generate a single penny in operating profit. With that said, many investors can look beyond this in the case of Virgin Galactic, as the stock is one for the future.

If you’re based in the UK and looking to buy Virgin Galactic shares online – this guide will show you everything you need to know.

We’ll walk you through the process of finding a suitable UK broker, making a deposit, and finally – buying Virgin Glaacxtic shares from the comfort of your home.

Step 1: Find a UK Stock Broker to Buy Virgin Galactic Shares

If you want to buy Virgin Galactic shares online – you will need to find an FCA-regulated broker that gives you access to the New York York Stock Exchange (NYSE).

This is the easy part – as there are hundreds of such brokers active in the UK. However, you need to dive a little bit deeper before opening an account. By this, we mean that you need to explore metrics surrounding fees, commissions, payment methods, customer support, and user-friendliness.

To save you from countless hours of mundane research – below you will find a small selection of hand-picked stock brokers that allow you to buy Virgin Galactic shares.

Step 2: Research Virgin Galactic Shares

When making an investment into large-cap blue chip stocks like Apple, Amazon, or IBM – the decision-making process is relatively straight forward. By this, we mean that you are investing in companies that not only have a proven business model and long-standing track record, but they are market leaders in their respective fields.

This is in the stark contrast to a stock like Virgin Galactic. After all, the firm is involved in an industry that at present – is completely unproven. Instead, there is no guarantee that space tourism will ever reach the mass markets. Even if it does, it remains to be seen whether Virgin Galactic will be the firm to make it happen.

As a result, it’s absolutely crucial that you perform some in-depth research prior to taking the plunge with this stock. To help you along the way, the following sections will outline the key points that you need to be aware of before you buy Virgin Galactic shares.

What is Virgin Galactic?

Virgin Galactic is the latest brain wave of Virgin Group founder Richard Branson. In a nutshell, the company’s vision is to bring space travel to the mass market. Well, by the mass market, we mean those that are able to afford the rumoured ticket price of $250,000.

For this, you will board the VSS Unity alongside 5 other space tourists. You will be catapulted into outer space – a mere 60 miles above planet Earth. Once there, you will have the opportunity to unfasten your seat belt and float at zero-gravity.

According to the Guardian newspaper – Virgin Galactic has already signed up 600 ‘paying’ customers. By our estimation, this means a secured inflow of $150 million.  The same article notes that the firm has also received strong interest from 400 additional clients.

If translated into paying customers – this would net a further $100 million. However, it is important to note that Virgin Galactic’s plan to launch its first commercial flight this year have since been delayed. Blaming the delay on the coronavirus pandemic, the first slight is now scheduled for some time in 2021.

Virgin Galactic Share Price History

Officially launched in 2014 – it wasn’t until late 2019 that Virgin Galactic opened its doors to outside investors. It’s initial public offering (IPO) – which saw its shares listed on the NYSE, raised $720 million in capital. In comparison to other IPOs that were initiated in earlier in the year, this is somewhat small-fry. However, Virgin Galactic actually managed to raise 20% more than it had originally hoped for.

At the time of the IPO, Virgin Galactic was (and arguably still is) defined as a ‘blank check’ company. Put simply, this means that investors were buying shares in a company that was yet to generate a single penny in revenue – let alone profit. Nevertheless, the Virgin Galactic share price was initially $10. Over the course of the following four months, Virgin Galactic shares soared – with the stocks hitting all-time highs of just over $37 in February 2020.

This represents a net return of more than 270% for those that got in on the IPO action. However – and much like the rest of the US and global stock markets, Virgin Galactic shares were heavily impacted by the fears and uncertainties of the pandemic. In fact, just a fours weeks later the shares dropped back to just over the $10 mark. There are two positives to note about the firm’s price action since its rapid 1-month decline.

Firstly, the shares managed to defend themselves by staying about the initial IPO price of $10. This is welcome news when the wider markets were experiencing mass hysteria. Secondly, Virgin Galactic shares have since recovered some of these losses. At the time of writing, the shares are valued at just over $21 each. This represents a recovery of almost 100% since March. In terms of market capitalisation, the stocks are collectively worth just under $5 billion as of October 2020.

Virgin Galactic Shares Dividend Information

Virgin Galactic does not pay dividends and likely will not do so for many, many years. After all, this growth stock is effectively a blank check company. Although it has secured 600 confirmed bookings – the firm is yet to make any profit.

On the contrary, Virgin Galactic is reporting losses – and will likely do so for the foreseeable future. This is common practice with up and coming tech firms anyway. For example, although Tesla has been in possession of a multi-billion pound valuation since it went public in 2010 – the electric car maker only recently turned a profit.

Nevertheless, if its dividend stocks that you are after, you can view our article on the best dividend stocks of 2020 here.

Should I Buy Virgin Galactic Shares?

Without attempting to sound trite – the answer to this question is somewhat simple. That is to say, do you believe that Virgin Galactic will be successful in its desire to bring space tourism to the wider markets? If so, then this growth stock could be a good addition to your wider portfolio. Be careful to keep stakes to a minimum, not least because there is no guarantee that Virgin Galactic will one day make it big.

If you’re still sitting on the fence as to whether or not you should buy Virgin Galactic shares – below you will find some important metrics to ponder over before parting with your money.

Catch This Company While it is Still Super-Young

Virgin Galactic is the epitome of a young tech stock. That is the say, the firm is operating in a new, exciting, and cutting-edge industry that could one day take the world by storm. After all, it is offering affluent consumers the ability to engage in space tourism. On the one hand – and as noted above, there is no guarantee that Virgin Galactic will be a success.

However, if it is, it would be reasonable to suggest that the company will be worth significantly more than its current market valuation of $4.6 billion. This is especially the case if the firm is able to one day bring its service to the mass consumer market by offering a more affordable price.

You Have a Second Chance to Buy the Shares at a Huge Discount

Those that missed out on the Virgin Galactic IPO were likely kicking themselves months later when the stocks hit $37. After all, the IPO valued the shares at just $10. However, with the pandemic putting a huge rail block on Virgin Galactic’s progress, the shares have since retreated.

Had you jumped on board in March of this year, you would have paid just above the initial IPO price of $10. The shares are higher as of October 2020 at $21, albeit, this is still much lower than the aforementioned all-time high of $37. As such, if you do believe in the Virgin Galactic project, now is the time to enter the market if you want to buy the shares at a discount.

600+ Confirmed Customers 

Even though it will be until at least 2021 when the first Virgin Galactic commercial flight takes off, the firm has already secured more than 600 paying customers. As noted above, this translates into a revenue of £150 million. It goes without saying that these paying customers are high-net-worth individuals that are interested in cutting-edge innovation. If and when the first commercial flight does take off, this could spur a whole new wave of paying customers for Virgin Galactic.

No Revenue in Q2 2020 and Losses Continue to Mount

On the one hand, it goes without saying that new tech companies are known to burn through cash for many, many years after launching. In this sense, Virgin Galactic is no different. For example, its Q2 2020 earning report published losses of $54 million. These losses stood at $53 million and $55 million in the two quarters prior. With that said, Virgin Galactic did not report any revenues at all in Q2 2020 – meaning that it had incoming free cash flows to help offset its losses.

New Bookings Begin to Cool-Off

Virgin Galactic’s most recent earnings report also noted that new bookings amounted to just under 300. This is down considering from the previous quarter which stood at about 400 new bookings. With that said, it’s likely that the drop-off was owed largely to the wider uncertainties of the pandemic.

Crucially, it is important to note that these new bookings are not confirmed and paid. On the contrary, Virgin Galactic is asking for a deposit of just $1,000 to secure these bookings. As such, it is reasonable to suggest that many of these bookings might not translate into fully-fledged, paying customers.

Billionaire Space Race is Hotting up

The ‘Billionaire Space Race’ is a term widely used to refer to the three key players that are looking to capitalise on the space tourism phenomenon. On top of Virgin Galactic, this also includes SpaceX and Blue Origin. The former is backed by Tesla and Paypal guru Elton Musk, while the latter is the brainchild of Amazon founder Jeff Bezos.

With this in mind, Virgin Galactic has some very serious competition in front of it. Although neither of its two main competitors are public companies – they are backed by firms with huge cash reserves. Furthermore, and perhaps most important, NASA awarded three commercial contracts worth a total of $14 billion in 2016 to three entities.

While this included SpaceX – Virgin Galactic did not get a look in. Ultimately, the key point here is that while space tourism looks set to become a substantial industry in its own right in the near future, Virgin Galactic isn’t the only company looking to dominate. This once again illustrates that the stock is potentially a high-risk, high-reward investment.

Virgin Galactic Shares Buy or Sell?

Market commentators appear to be sitting on the fence when it comes to assigning a buy/sell rating for Virgin Galactic. On one side of the argument, proponents of the company note that Virgin Galactic represents a classic tech growth stock that could one day be worth significantly more than its current $4.6 billion valuation.

At the other end of the spectrum, opponents of the stock will argue that Virgin Galactic’s business model is still unproven and that its lack of sizable orders should be a concern for investors. As a result, whether or not Virgin Galactic represents a viable long-term investment is your decision to make. The only way to do this is to perform heaps of in-depth research.

The Verdict?

Virgin Galactic investors will be hoping that the firm will be the one to dominate the future of space tourism. It does, however, have stiff competition on its hands – with the likes of SpaceX (Elon Musk) and Blue Origin (Jeff Bozos) also looking to take this innovative sector by the horns.

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