Branson's IPO is coming to town# Stock
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Takeoff! Virgin America prices its IPO
By Jesse Solomon @JesseSolomonCNN November 13, 2014: 9:34 PM ET
virgin america ipo Sir Richard Branson celebrates the start of Virgin
America flights to Las Vegas.
NEW YORK (CNNMoney)
Virgin America markets itself as the hip way to fly. Now it wants to sell
itself to to investors as a hot stock.
The upstart airline formed by billionaire Sir Richard Branson priced its
initial public offering Thursday at $23 a share, which was in the high end
of its $21-24 range. The IPO raised more than $300 million, and shares will
begin trading Friday on the Nasdaq exchange under the ticker symbol "VA."
The company has its main hubs in California and is going public at a time
when airline stocks are soaring.
Delta (DAL) is up over 60% this year, for example, while JetBlue (JBLU) has
climbed almost 50%. Fuel prices are low and more people are traveling for
business and pleasure as the U.S. economy improves.
Related: The best time to book your holiday flight is...
Will hip work on Wall Street? Virgin America is much smaller than its
airline rivals though. It lost $395 million from 2009 through 201 before
eking out a $10 million profit last year.
The airline is marketing its turnaround heavily to investors. In the first
nine months of this year, it's made $56 million, according a regulatory
filing.
Where the airline has excelled is differentiating itself in a crowded market
. Its planes have names such as "Virgin & Tonic," and "Jefferson Airplane,"
and its cabins feature purple mood lighting and leather seats. Its inflight
safety demonstrations are highly produced pop music videos. Its launch
parties are celebrity affairs.
Everything it does reinforces its mission to be a hip alternative to the
traditional (and largely hated) flying experience. The question now is
whether that will sell on Wall Street.
Spirit Airlines wants to 'hug the haters'
Spirit Airlines wants to 'hug the haters'
The Branson effect: While Virgin America got its name from Branson's Virgin
Atlantic airline, it is not majority owned by Branson, Virgin Atlantic or
Virgin Group. That's because Americans must own most of an airline in order
for it to fly between U.S. cities. Cyrus Capital Partners, a distressed debt
fund manager, is its largest single shareholder.
The IPO comes just weeks after a spaceship from Virgin Galactic, Branson's
space tourism venture, exploded over the California desert, killing its
pilot. The British businessman has vowed to continue with the space endeavor.
Related: Virgin Galactic ticketholder No. 610 has 'no regrets'
The carrier's primary hubs are Los Angeles and San Francisco, but it's
expanding operations at New York's La Guardia Airport, Washington's Reagan
National and Dallas' Love Field after the Justice Department required
American Airlines and US Airways to give up some gates as a condition of
approving their merger.
Virgin America has also expanded its routes to Mexican hot spots Cancun,
Cabo San Lucas, and Puerto Vallarta.
By Jesse Solomon @JesseSolomonCNN November 13, 2014: 9:34 PM ET
virgin america ipo Sir Richard Branson celebrates the start of Virgin
America flights to Las Vegas.
NEW YORK (CNNMoney)
Virgin America markets itself as the hip way to fly. Now it wants to sell
itself to to investors as a hot stock.
The upstart airline formed by billionaire Sir Richard Branson priced its
initial public offering Thursday at $23 a share, which was in the high end
of its $21-24 range. The IPO raised more than $300 million, and shares will
begin trading Friday on the Nasdaq exchange under the ticker symbol "VA."
The company has its main hubs in California and is going public at a time
when airline stocks are soaring.
Delta (DAL) is up over 60% this year, for example, while JetBlue (JBLU) has
climbed almost 50%. Fuel prices are low and more people are traveling for
business and pleasure as the U.S. economy improves.
Related: The best time to book your holiday flight is...
Will hip work on Wall Street? Virgin America is much smaller than its
airline rivals though. It lost $395 million from 2009 through 201 before
eking out a $10 million profit last year.
The airline is marketing its turnaround heavily to investors. In the first
nine months of this year, it's made $56 million, according a regulatory
filing.
Where the airline has excelled is differentiating itself in a crowded market
. Its planes have names such as "Virgin & Tonic," and "Jefferson Airplane,"
and its cabins feature purple mood lighting and leather seats. Its inflight
safety demonstrations are highly produced pop music videos. Its launch
parties are celebrity affairs.
Everything it does reinforces its mission to be a hip alternative to the
traditional (and largely hated) flying experience. The question now is
whether that will sell on Wall Street.
Spirit Airlines wants to 'hug the haters'
Spirit Airlines wants to 'hug the haters'
The Branson effect: While Virgin America got its name from Branson's Virgin
Atlantic airline, it is not majority owned by Branson, Virgin Atlantic or
Virgin Group. That's because Americans must own most of an airline in order
for it to fly between U.S. cities. Cyrus Capital Partners, a distressed debt
fund manager, is its largest single shareholder.
The IPO comes just weeks after a spaceship from Virgin Galactic, Branson's
space tourism venture, exploded over the California desert, killing its
pilot. The British businessman has vowed to continue with the space endeavor.
Related: Virgin Galactic ticketholder No. 610 has 'no regrets'
The carrier's primary hubs are Los Angeles and San Francisco, but it's
expanding operations at New York's La Guardia Airport, Washington's Reagan
National and Dallas' Love Field after the Justice Department required
American Airlines and US Airways to give up some gates as a condition of
approving their merger.
Virgin America has also expanded its routes to Mexican hot spots Cancun,
Cabo San Lucas, and Puerto Vallarta.