It is a truth universally acknowledged that a man in possession of a large fortune must be in want of a way to burn through it.
And how better to get rid of a few billion than spray it with rocket fuel, set it alight, and sit atop it to be fired into space for no better reason than to call yourself Astronaut 001.
It is not yet known how the 567 people who went to space before Richard Branson, and unlike him actually left orbit, feel about his self-awarded accolade.
But the corpse of Laika the dog, who was aboard Sputnik 2 in 1957 and spent 162 days in space, 4 of them alive, before crash-landing in the Amazon, has reanimated to cough “w***er” in his general direction.
Branson’s latest ego trip is a bit like saying that driving the car out of the garage is the equivalent of Lewis Hamilton burning up the Nürburgring, or that losing a football match on penalties requires a bank holiday to mark your glorious failure.
Perhaps the most confusing thing about it is that he scheduled his Bezos-beating trip on the same day that 2 billion people worldwide were watching a football match.
It was almost as brilliant as launching a cruise ship business 3 months into a pandemic. Has Britain’s best self-publicist finally surrendered his crown to Rita Ora?
But it does seem to have been a good way to guarantee some flattering, journalists-are-busy-elsewhere coverage about his great feat, while few people noticed that last year he was begging for £500m of taxpayer help to bailout his airline.
(Image: REUTERS)
That request was preceded by 3,550 job cuts at Virgin Atlantic, and after being refused it was followed by a £1.2bn privately-funded rescue plan (surely he should have tried that first? – Ed) , and another 1,150 redundancies.
The 40% of staff his airline fired in the past year will no doubt be thrilled the hairy-toothed twit found a couple of billion down the back of the sofa with which to propel himself into space.
They might be a little disappointed that he came back.
(Image: REUTERS)
But let us look more closely at what’s going on here. Virgin Galactic was founded in 2004, and Branson – who claims estimates of his personal wealth are based on company valuations rather than cash in the bank – ploughed in $100m from his Virgin Group.
It then struck an investment deal with the sovereign wealth fund of Abu Dhabi, which owns more than a third of it. Public accounts show that the project has lost $889m since 2017. It has relied upon the government of Mexico to fund development of the Mojave desert spaceport where it is the main client.
In 2008, Branson said the first flight would be within 18 months. Two years later he was promising to dress up as Father Christmas for a flight on December 25, and in 2014 the Sunday Times reported he was facing a backlash from passengers who’d handed over $80m and were no nearer take-off.
After a crash, glitches, pilot error, rebuilds and redesigns, the business was finally floated on the New York Stock Exchange in 2019. And therein, dear Reader, we may find the reason why Britain’s biggest ego was happy to fling itself into space while a third of the planet was looking the other way.
Market analysts have reported that, due to the company’s track record of long delays, it was having problems convincing investors. In 2017, Branson signed a $1bn deal with Saudi Arabia’s Prince Mohammed bin Salman, in return for Virgin investment in the desert kingdom, and a possible spaceport.
But the agreement collapsed after the murder and dismemberment of journalist Jamal Khashoggi, which caused international condemnation. Searching for a less blood-spattered cash injection, Branson merged Virgin Galactic with a company run by a venture capitalist, which enabled him to float it on the stock market.
A share price that opened at $10 shot up to $54 this February, and the firm was worth $12bn. But in March the venture capitalist dumped $200m of stock, in April, Branson sold $150m more, and publication of this year’s first quarter accounts was delayed by a week.
When they were published, they announced not only zero income, but pushed the first flight back to May. Stock dived by almost a third, to just $16 a share.
And on June 25, when Branson announced his firm finally had approval for the first passenger flights, it rose to $55.91 – the highest-ever.
That’s the point of the flight – the share price. And by Branson’s own account, his wealth depends on the value others place on his businesses, which in the past year have taken a beating.
Airlines, train companies, cruise ships are a liability in a pandemic. It’s no wonder that, while going around cap-in-hand to governments and private investors, the increasingly-desperate Branson has offered up his own Caribbean hideaway island of Necker as collateral.
He runs many firms and employs many people. But any business is a house of cards, with investment and customers dependent on belief, faith, and branding. Once a business looks toxic, it becomes so, and the same is true of looking successful.
Virgin Galactic, had it delayed for even a week longer, would have been overtaken. Jeff Bezos’ Blue Origin is going sub-orbital in a few days, and because he has funded its development himself to the tune of $1bn a year, it could have destroyed Virgin Galactic’s share price without the Amazon founder’s stock options being at any risk at all.
And that’s why Branson had to be first among unequals – if he wasn’t, he’d have dropped off the radar entirely. The space tourism industry is predicted to be worth billions over the next decade, and he has shown you can get in on the ground floor with some cash and a lot of chutzpah.
But it is worth noting that, by burning through other people’s money, living in tax exile in the British Virgin Islands, asking for government help, and firing people from a business that was losing money while ploughing cash into a business that has lost far more, Richard Branson has, somehow, probably made himself even richer in the long run.
And all over what amounts to nothing more than a kind of rollercoaster, offering just a few minutes of weightlessness in return for the price of a house.
Apparently it makes you feel floaty, light-headed and euphoric, which is how any of us can feel for the price of £10 and a bottle of wine.
Just make sure you didn’t buy it from Richard Branson, or the marketing might make you feel sick too.
