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STOCK-PICKING CHIMP: THE LATEST RECOMMENDATION

Virgin Galactic, which promises to take passengers into space, is slated to go public on the New York Stock Exchange next week with the symbol “SPCE.” But despite all fuss, this chimp says “Just Don’t Buy It!” no matter how exciting it sounds or how cool the uniforms may look.

I mean no offense to Richard Branson, who is clearly having a lot of fun with the enormous wealth he has built. Frankly, if I had his kind of money I’d be doing some crazy sh*t like this too!  

He’s also sort of cute and looks a lot like a chimp I roomed with back in college.

I do wish them well, but it’s one thing to build a business around something we all really need, like air-travel, cellphones or primate vitamins, but a very different story when a flight costs $250,000, and they don’t even let you get off the ship! Not surprisingly, Virgin Galactic is avoiding the regulatory scrutiny of a normal IPO, instead choosing to merge with an existing company on the NYSE, yielding a combined company reportedly valued at $1.5 Billion. While that’s a lot of bananas – I’m here to tell you to keep your diaper on and your powder dry for future ideas that I can recommend.

SPACE TOURISM? THAT’S TOTALLY BANANAS!

Fortunately, as a life-long chimp, I am grounded in reality, and tree branches are about as high as I like to get. My reality says that dung doesn’t technically “fly,” and “Space Tourism” is not a business! Can you even call it “tourism” if you never stop the bus and let people get off to snap photos, buy souvenirs and use the facilities? They also better not let environmentalists focus on the carbon footprint, as that will not be pretty!

No, this is not Section 4 ready for boarding – it’s a bunch of VG employees!

Now a fool and his money are soon parted, and Virgin Galactic has reportedly sold 600 tickets to celebrities and the super-rich for an impressive total of $150M, right? But how many other people have that kind of money for a flight to nowhere? Of that group of the pampered, super-rich, how many want to get crammed into a tin can and get flung into space without any duty-free shopping? And while you ponder that, consider how many people will join the frequent flyer program? Exactly! A Weekly World News staffer has confirmed that no such program is even in development!

CHIMP NUMBER-CRUNCHING

So the Stock-Picking Chimp did what he does best – I began to crunch the numbers and at 6 passengers per flight, they would need at least 100 flights to service all those customers. But fully taxing my fingers, toes and opposable thumbs, I could not make sense of how they could possibly cover the immense costs for fuel, pilots, support, veterinarians on call, infrastructure, fruit and vegetables, insurance (must be pretty high) and all the free VG swag – with just $1.5M in revenue per flight. Plus, to get you to space requires two vehicles not one – and one of them, named WhiteKnightTwo, looks like it was dreamed up by our Siamese Twins reporter! Its sole job is to escort the other spacecraft, SpaceShipTwo, into space.

Here’s WhiteKnightTwo (left), with its passenger SpaceShipTwo (bottom right), filled with rich folk.

Now fellow hominids, here’s where this gets most dubious as an investment. Recently, Boeing made a $20M investment in Virgin Galactic. That is notable for two reason – one it’s a drop in the bucket for such a large company (Branson has personally chipped in $1B already) and two, I sure hope they are not involved in any way on the guidance systems for the vessel…

I could go on – but I think I’ve made my point, and now it’s time for Mutual of Omaha reruns!

Until next time –

The Stock Picking Chimp
Investments without the Monkey Business

P.S. My last pick CGW is up 6.6% since I recommended on 10/10/19.  Just sayin’.

DISCLAIMER: Do not take investing advice from a chimpanzee. Talk to your investment adviser or your psychiatrist.

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