Even billionaires are faced with difficult decisions in the era of the coronavirus. Sir Richard Branson may have to sell up to $ 400 million of its Virgin Galactic shares to save its business empire from the escalating costs of the coronavirus pandemic. The move comes in the wake of Branson’s airline Virgin Atlantic, which is on the verge of sinking since the pandemic virtually canceled its trip around the world.
The Branson Virgin Group recently announced in a statement to the New York Stock Exchange that it could offer 25 million of its common shares in Virgin Galactic. Branson owns nearly 81% of Virgin Galactic. At the time of this writing, shares in the Branson space exploration company are trading at $ 15.88, down from a high of $ 37 in February. In the statement, Virgin Group said it “would use any product to support its portfolio of global leisure, vacation and travel activities that have been affected by the unprecedented impact of COVID-19”.
Virgin Galactic aims to bring space tourism to the masses in the not-too-distant future. The company went public in October 2019. Virgin Galactic has a market capitalization of $ 4.1 billion. Leonardo DiCaprio and Justin Bieber are expected to be among the first to join Branson on Virgin Galactic’s first suborbital flight.
Branson sells the shares to protect Virgin Atlantic, which has proven to be most at risk of holding Virgin shares. Last week, Virgin Atlantic announced the loss of 3,150 jobs and the stopping of flights from London Gatwick. Last weekend, it was reported that Branson had hired an investment bank to help find investors willing to invest emergency funds in the transatlantic airline. All of this comes on the heels of the British government’s refusal to help finance the preservation of Virgin Atlantic. Branson was looking for a $ 622 million coronavirus rescue plan.
In a blog post, Branson wrote: “We will do everything we can to keep the airline running – but we will need government support to do so in the face of serious travel uncertainty today and without knowing how long the planes will be. It would take the form of a commercial loan – it wouldn’t be free money and the airline would pay it back. ”
He went on to say that many airlines around the world need government support to stay solvent. He is right. Without help, hundreds of thousands of jobs will be lost, the competition will disappear, and the cost of theft will increase, and may become prohibitive for many people. Competition in the airline industry is crucial. With it you will find round trip fares of $ 400 from Los Angeles to Paris. Otherwise, you pay, say, $ 2,500 to get to Paris from Los Angeles.
We wish Richard Branson good luck finding the right investor and saving Virgin Atlantic!