Virgin America shares rose 30% on first day of trading on the stock exchange

Last Friday, shares of Richard Branson's airline Virgin America began trading on the NASDAQ stock exchange. On the first day of trading, quotes for this low-cost airline soared by 30%.

At the end of last week, the low-cost American airline Virgin America, co-owned by the famous British businessman Richard Branson, successfully completed its initial public offering on the NASDAQ stock exchange. Some experts feared that the IPO could be negatively affected by the recent crash of Richard Branson's Virgin Atlantic private spaceship SpaceShipTwo. However, investors welcomed Virgin America shares: the company earned $310 million from the IPO, placing it at the upper limit of the price corridor. In addition, Virgin America's share price jumped 30% on its first day of trading, bringing the low-cost carrier's market capitalization to $1.3 billion.

The airline was founded in 2007 on the eve of the financial crisis, which almost called into question its continued existence. During the first years of operation, Virgin America suffered losses and only in 2013 made its first profit of $10 million on revenue of $1.4 billion. The airline's 53 Airbus aircraft fly between the United States, Mexico and Canada, as well as between Washington, New York, Chicago, San Francisco, Anchorage, Las Vegas, Los Angeles and other American cities. Under US law, a foreigner cannot own more than 25% of an airline operating domestically. Therefore, in addition to Mr. Branson, who owns 24.8% of Virgin America shares, the key shareholder is the American investment fund Cyrus Capital Partners, which owns 32.8% of the shares, the remaining shares belong to other American shareholders who make up the consortium of investors VAI Partners.

However, Virgin America, which uses the brand of Richard Branson's Virgin Group empire, is identified by everyone with him. The image of the airline itself largely corresponds to the image of an eccentric British businessman who, back in the late 1970s, helped promote the then not very well-known British punk band the Sex Pistols. The company has already become famous for its controversial commercials, presentations, as well as the bright interior of aircraft cabins. In addition, in October, Conde Nast Traveler magazine recognized Virgin America as the best US airline for the seventh time in a row based on the results of its annual reader survey.

Evgeny Khvostik

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Richard Branson had a good Friday at NASDAQ