Investing.com - Virgin Galactic surged Monday in its public market debut, with investors backing the company's mission to ramp up space tourism.
Virgin Galactic (NYSE:SPCE), backed by Sir Richard Branson, surged as much as 5% after opening at $12.50. It took an unconventional path to Wall Street, ditching the traditional IPO route and going public with a direct listing after raising funds through a merger with Social Capital Hedosophia .
Social Capital Hedosophia forked out $800 million for a 49% stake in the company.
"We believe Virgin Galactic is ideally positioned to capitalize on the fast-growing, multibillion-dollar commercial space market and ultimately open space to thousands of new astronauts," Branson said on the trading floor, according to reports.
Space tourism has yet to take off, with only the rich and famous seemingly able to afford the opportunity to get a taste of astronaut life. The 90-minute space ride is priced at about $250,000 per ticket, according to Virgin.
Virgin does not, however, see the ticket price as a stumbling block, with the company expected to turn a profit by 2023.
The company said it already sold 600 tickets, hauling in $80 million from customers, with 15 trips in the pipeline for next year. In 2023, the company expects to make 270 trips to space, generating more than $430 million in profit.
Virgin's commercial space mission is behind schedule after the death of a pilot in 2014 during a flight test forced the company to delay its space program.
But Virgin Galatic is not the only company vying to become the first company to ferry customers into space.
Elon Musk's SpaceX and Blue Origin, the space venture of Amazon (NASDAQ:AMZN) founder Jeff Bezos, are also in the space race.
The trio's efforts are expected to pave the wave for more affordable space tourism, which will be a $3 billion market by 2030, according to UBS.
“While space tourism is still at a nascent phase, we think that as technology becomes proven, and the cost falls due to technology and competition, space tourism will become more mainstream,” UBS analysts Jarrod Castle and Myles Walton wrote in the note. “Space tourism could be the stepping stone for the development of long-haul travel on earth serviced by space."