What happened
Richard Branson will go to space on July 11, and the news is causing shares of Virgin Galactic Holdings (SPCE 0.71%) to rocket higher. Virgin Galactic shares jumped 20% on Friday morning as the billionaire space race took a fresh new turn.
So what
Branson had originally hoped to go into space aboard a Virgin Galactic flight last year to celebrate his 70th birthday, but a combination of pandemic-related issues and some engineering setbacks caused delays to the company's testing schedule. But Virgin Galactic is back on track, last week winning Federal Aviation Administration approval to fly passengers into space.
Image source: Virgin Galactic.
That FAA license clears Branson to hop aboard the next test flight, and the billionaire entrepreneur late Thursday said he intends to go along for the ride.
"After a successful flight in late May and Federal Aviation Administration (FAA) approval for a Full Commercial Launch Licence, the pathway towards commercial launch is clear," Branson wrote in a statement. "Virgin Galactic still has tests to come, and this is the time for me to assess the astronaut experience."
Assuming the flight goes off as scheduled, Branson will beat fellow billionaire Jeff Bezos into space. Last month, Bezos' Blue Origin announced the Amazon founder and his brother would be on board its scheduled July 20 test flight.
Now what
It's easy to dismiss Bezos and Branson trying to beat each other into space as nothing more than an ego battle between billionaires, but given the publicity that has gone along with the race it arguably is a plus for these businesses. At the end of the day, launching Richard Branson into space is not going to be enough to justify Virgin Galactic's sky-high $12 billion valuation.
Virgin Galactic has been a high-risk, high potential reward stock prone to extreme volatility, and that is unlikely to change any time soon. In the months to come the company will have a chance to show its systems work, and by early 2022 could be regularly ferrying tourists to space. Investors who are along for the ride should keep their seatbelts fastened.
