On the Distastefulness of Virgin Cola: The Potential of Virgin Galactic

Virgin Galactic IPO
On the Distastefulness of Virgin Cola: The Potential of Virgin Galactic

I have an idea for you if you have a spare quarter of a million dollars.

Put it aside so you can grab a ticket on a Virgin Galactic flight when they next go on sale.

The first batch are already sold.

The good news is that you may not have long to wait. Virgin Galactic’s suborbital space flights begin next year.

How cool is this?

Full credit to Richard Branson. What an amazing achievement to turn this dream into a commercial reality.

But it does make me wonder…

Yesterday we finished off with the idea that at market peaks we usually see the world’s largest, tallest or grandiose projects.

There should also — ideally — be a large dose of heady optimism, if not complete euphoria too.

One wonders if space is the thing to turn the investing public off the eternal focus on debts, deficits and interest rates, to a giddy appreciation of the potential profits up above.

The financial service industry loves nothing more than a growth story. We know one thing.

The numbers could be extreme here. There are trillions of natural resources locked up in asteroids.

And the ultimate status symbol will no longer be travelling first class to Europe or something like that. It will be riding through space.

It’s not as if Virgin is the only player.

Elon Musk came out over the weekend suggesting you might be able to go around the Earth as soon as next year in one of his rockets.

That’s just for starters. He’s really aiming for the Moon, then Mars.

It’s the stuff of science fiction — except it’s all really happening in our lifetimes.

It’s another reason I pay no attention to the permabears.

Can you imagine the growth premium stocks related to the space industry could command in the near future?

If this doesn’t get you up and out of bed with a spring in your step, you’re a lost cause!

A big IPO to watch

We don’t have long to find out what these kinds of businesses could trade for in the open market.

Virgin Galactic is likely to go public by the end of this year. This is worth watching for.

Out here in Australia, some of the biotech names are catching the eye of the market.

I can tell you where it’s not, too — the cannabis names.

A month or two ago I made the case for a lot of merger and acquisition activity to start happening here.

It seemed to me there were a lot of cannabis stocks way down off their highs but a big growth industry still surging ahead.

I went to enormous effort to go over every major cannabis stock on the ASX and assess their business plans and near term catalysts.

One thing is clear: the market couldn’t care less what I think!

The cannabis stocks have stalled for the moment.

One reason is that the international story has cooled. Investors are no longer willing to pay a huge premium just to access the opportunity.

It’s coming back to delivering good numbers like any other business.

But the Aussie names have gone quiet on the news front as well. This highlights an important point.

The market feeds off news announcements like contract wins, bigger clients and or more market share and revenues.

That’s what you need to see to get your stocks moving.

Otherwise you run the risk of holding a stock that doesn’t do much.

That doesn’t mean they’re automatically a sell or to avoid them.

But it does mean having a clear idea of what exactly your waiting for — and thinking about when it might be time to jump ship.

A garden bed of ideas

This can be one of the most frustrating things about the share market.

I have a stock on my buy list that simply will not move. It has been down the entire time I have recommended it.

It has everything I usually look for — a bright outlook, credible management, great tech, and even an international investor base.

All the ingredients are there for it to surge…if it could just build momentum.

Any day I could get up and find it’s released massive news. But every day this year it hasn’t.

That’s why it’s important to have a spread of ideas that can deliver in this way.

There’s always one or two that just don’t work for whatever reason. But enough do to make the pursuit very worthwhile.

After all…Richard Branson has his epic company Virgin Galactic.

But the world probably won’t remember his ugly baby: Virgin Cola.

The reality is though that he’d never have the great business without the other.


Callum Newman Signature

Callum Newman,
Editor, Profit Watch