Richard Branson is making headlines on three continents. The serial entrepreneur is selling Virgin Mobile USA to partner Sprint-Nextel well below its IPO price.
But his latest mediocre performance in the US isn't stopping him elsewhere. Abu Dhabi is ponying up money for his loopy spaceship venture and his Aussie airline Virgin Blue is planning a rights issue. Branson's record doesn't give investors any certainty.
Sprint, which already owned 13.1 per cent of Virgin Mobile in the US, is paying $5.50 a share for the remainder of the virtual network operatora far cry from the $15 IPO price back in October 2007.
While parent company Virgin Group may have had a gain on its original investment, any outsider who bought shares back then is nursing a 63 per cent loss.
The deal contrasts with another of Branson's telecom forays where investors did well- the 2006 sale of Virgin Mobile in the UK to cable operator NTL for nearly twice its IPO price.
Despite the patchy record, investors still seem to be giving Branson the benefit of doubt. On July 27, Australian airline Virgin Blue announced a A$231 ($188 million) rights issue to shore up the company following a difficult year. The offer was 12 times oversubscribed.
In perhaps an even bigger leap of faith, Abu Dhabi's Aabar said on July 28 that it would partner with Virgin's space tourism business, paying $280 million for 32 per cent of Virgin Galactic. The project has yet to take off, but suggests that enthusiasm for Virgin ventures of all stripes remains sky high. Investors might want to remember that Branson hasn't always delivered the moon.
Image: Richard Branson
© 2024 Rediff.com -