“Haven’t you seen that episode already?”
“Yep, but it’s a good one.”
That conversation took place multiple times when I was a child. It was my father asking me why I was watching the same episode of Star Trek that I’d already seen 3 or 4 times.
I’m still a huge fan of all things space. That’s why I was super excited to see Virgin Galactic announce they would be entering the stock market through, wait for it…a SPAC. Another of my favorite things!
The Long Road to Space Tourism
It’s taken a long time (in internet years anyhow) to get to the threshold of space tourism. And the road has not been smooth for Virgin Galactic.
The untimely death of a test pilot, after a midair breakup of his spaceship in 2014, was a major setback. Especially to a company aiming to provide public access to space.
Space is not “easy”, and the risk of an accident, which could take the company offline for an extended period, should always be on investors minds.
But today Virgin Galactic appears to be on the verge of flying its first customer, and the company has decided to get an infusion of cash by merging with Social Capital Hedosophia Holdings (IPOA/IPOAWS), a SPAC.
An Exciting Investment
If you’ve read my blog, you know that Virgin Galactic, or more precisely, Scaled Composites, holds a special place in my heart.
Scaled Composites builds the spaceship, SpaceShipTwo, that Sir Richard Branson and Virgin Galactic hope to bring to a spaceport near you.
I was lucky enough, as you can read in the post linked to above, to get to live out a little of my childhood infatuation with space as a consultant.
I was part of a team that performed a due diligence review of Scaled Composites when it went on the block several years ago. Knowing about the idea of the Stratolaunch, before it became public knowledge, was a particular thrill.
So would I like to have a few Social Capital Hedosophia Holdings warrants (who the heck came up with that name anyhow???) in my account?
HECK YEAH!! If you’re into “space” stuff, who wouldn’t?
So do I own any of those warrants right now (July 18, 2019) after the announcement of the Virgin Galactic merger? HECK NO!!
I love space stuff. But I love making money even more.
Pattern, Pattern, Pattern
I’ve said it before, and I’ll say it again, and again, and again…Patterns Make You Rich.
So the first thing I’m looking for, with ANY SPAC, is where we are in the pattern that I know a SPAC warrant usually follows.
If you’ve gone through my Warrant Secrets and SPAC courses, you know these patterns too. They happen over, and over, and over…you get the idea.
Where are we in the pattern with IPOAWS?
When a SPAC announces a merger we generally see a pop in the warrants. This happens because the warrant, which has the potential to be worth $0, is now probably worth something.
Check.
The warrant then typically falls back slightly off of that initial merger euphoria.
IPOAWS…Check.
Then, and this is where we are now, (so pay attention, this is the important part) the warrant slowly drifts lower until the stockholder meeting to approve the merger is near.
Now, will IPOAWS follow the pattern and drift lower? Of course, and that is when it can be bought!
That last sentence was a test to see if you’re awake while reading this!! Will IPOAWS follow the pattern and drift lower? I have no idea, and neither do you or anyone else!!! That’s the real answer.
But, I’ll be waiting for the pattern to play out, because that is how we make the big bucks.
If the new Virgin Galactic warrants drift lower, I’ll be waiting with a buy order, and I’ll pick up a few and continue to enjoy my space infatuation by owning a few “space” warrants.
But, if they don’t, then I’ll look for the next warrant that does follow the pattern, and maybe use some of that money to book a flight to space. 😉
Celebrating 50 Years of Space
If you’ve been following the news this week, then you’ve seen the various ways the moon landing of 50 years ago is being celebrated.
I’m headed down to the Washington Monument tonight with the fam to see a projection of the Saturn rocket that launched the Apollo 11 mission projected on the monument!!