News & Analysis

The woke vs the disruptor! Virgin Galactic at 1 month low in polarized battle against Musk

Andrew Saks, Friday, 16 July 2021

Richard Branson is an evergreen master of public image, a courtier of the media and a bastion of all that is wholesome in the eyes of the middle aged, middle class British public.

Elon Musk is the absolute opposite. He is a sharp-suited, ultra-modern, outspoken and disruptive market maker who repeatedly comes out of nowhere and turns entire industries and entire markets on their heads.

Richard Branson's Virgin brand and its range of services which cover media, television, air travel, fitness clubs and internet service have spent several years appearing to perfect the existing industry sectors in which they operate, and like most influential household names, have an overtly styled, permanently smiling Richard Branson periodically appearing, shaking the hands of customers, and showing how much he is 'giving back'.

The projection of a wholesome entrepreneur who characterized success and polished customer service - anyone who has flown on Virgin Atlantic will appreciate the difference between the high level of quality and the surly, civil servantesque approach of rival British Airways - along with Mr Branson's 'look at me, I care' woolly jumpers and long hair has been a combination that has worked for decades.

Counteracting this is Mr Musk's approach, which is completely the opposite. Mr Musk does what he wants to do and says what he thinks. He is the epitome of an inventor and innovator who takes new ideas with both hands and throws them at the traditional methods in almost every area, with the intention of showing the world that they are wrong and he is right.

He does not pander to woke, politically correct ideology, names his daughter by using a mathematical equation, and doesn't pretend to be a tree hugging, smiling friend of the earth who is here to give you a nice, fluffy service when you buy into his brand.

It is therefore very interesting to see the two completely opposite characters go into almost head-to-head battle. Richard Branson has been stepping up his Virgin Galactic company's mettle, and now has his first fully manned spaceflight ready for launch.

Virgin Galactic is a publicly listed company on the New York Stock Exchange, therefore giving investors a chance to take part in this revolutionization of personal travel, clearly demonstrating that unlike the previous era in which the world was obsessed with extra-terrestrial exploration, the war today is between two media-hungry, publicity-courting business empire leaders, and not the free market world against the communists from behind the iron curtain.

Back in 1961, Yuri Gagarin was the poster boy of the teenage aspirations of an entire demographic. He was a wholesome superhero for the socialist ideology of a worldwide society, but that was not investable whereas today's space race is between individuals who have a persona and an ideology, and are investible.

Government backing and national flags have given way to influencers and volatile stock prices.

Virgin Galactic's stock is down to a one-month low today, despite the company having successfully launched its Mr Branson and five other crewmembers into suborbital space on July 11, representing a milestone mission that marked the first fully crewed flight of its VSS Unity space plane.

Perhaps one of the important factors here is that Mr Branson may not be too concerned about the activities of Mr Musk and his Space-X company, and investors, who are shrewd and do not look at the glitz and glamour of all the photos of Mssrs Branson and Musk lit from behind with dazzling lights as if they were Star Trek extras, and instead look at the cold, hard and realistic business position.

The reality is that Virgin Galactic's main competitor in the suborbital space tourism industry is not eccentric cryptocurrency fanatic Elon Musk and his Space-X vanity project. Instead, it is the absolutely astute Jeff Bezos' Blue Origin, which is gearing up for a big flight of its own this month.

Mr Bezos and three other people, including pioneering aviator Wally Funk, are scheduled to launch July 20 on the first crewed flight of Blue Origin's New Shepard suborbital vehicle.

Going into battle with anything related to Jeff Bezos or Amazon is a different matter altogether. Amazon is a stalwart, and Jeff Bezos is a calculated business mogul, not a publicity-hungry social media influencer.

Amazon has already proven that it is capable of dominating entire business sectors with great ease. Look at the data monopoly the company has on financial market data.

Amazon Web Services (AWS) has a stranglehold over the transmission and reporting aspect of all retail OTC derivatives conformity to MiFID II’s directive, meaning that whenever a regulatory technology company sends its data to a reporting entity, it is giving its entire intellectual property to Amazon.

That, whichever way you look at it, is a monopoly, and a problematic one at that. Amazon, like all the large internet companies, is a data company. It is similar to Google, Alibaba, Facebook and eBay in its collaboration with big government and influence over the world’s markets and political leaders due to its harvesting of mass data and very detailed knowledge on how to assemble it.

That is a far bigger force to reckon with, and going into space is no mean feat, therefore confidence in investment would come down to considering which of these two companies will master it, and which will use too many resources and close down.

Amazon's stock is evergreen, despite the company's CEO spending a fortune on a space folly, yet investors are watching Virgin Galactic stock with a close eye, especially as it hit a low point in value when the company and its founder are basking in high levels of media coverage about personal space travel which is still in its pioneering stages.

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