Virgin Galactic in the News With a SPAC Transaction
By George Wilson
As you may have heard, Virgin Galactic, Richard Branson’s space tourism company, began trading on the NYSE on October 28, 2019. There was not a lot of press leading up to this listing as the company did not purse a traditional IPO. The company achieved its NYSE listing by merging with a special purpose acquisition company or “SPAC”. A SPAC is a company that raises capital through an IPO and lists on an exchange with the intention of finding another company to acquire. Virgin Galactic merged with a SPAC named Social Capital Hedosophia Holdings Corp. This interesting transaction is very similar to a reverse merger. In the combination of Virgin Galactic with Social Capital Hedosophia Holdings Corp. the accounting acquirer is Virgin Galactic and the legal acquirer is Social Capital Hedosophia Holdings Corp. This in essence results in a NYSE traded company with the historical financial statements of Virgin Galactic, but with the equity section replaced by that of Social Capital Hedosophia Holdings Corp. If you would like to read more check out this definitive proxy statement.
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