Virgin Galactic (SPCE  ) was higher by 10% in premarket trading following its first successful test space flight. However, shares sold off and finished lower on the day. Going into the launch, share prices had nearly tripled over the past 2 months.

It was an important milestone for Virgin Galactic which is attempting to commercialize space tourism. Additionally, it was able to beat the Jeff Bezos-backed Blue Origin which is expected to launch into space later this month. Branson was originally set to go on a later flight but changed his date to beat Bezos. The competition did generate some social media acrimony between the two companies as Blue Origin's social media team pointed out that it is actually going into space, while Virgin Galactic would technically remain in the atmosphere.

Branson's Big Win

Sir Richard Branson has been outspoken in his desire to visit space and bring space tourism to the masses. Like Bezos, he was on the company's first flight which is certainly a vote of confidence in Virgin Galactic's technology. The VSS Unity launched from New Mexico with two pilots, Branson, and 3 employees. The rocket was launched at 40,000 feet in the air, and it took the capsule to the edge of space, while accelerating to faster than 3x the speed of sound.

At its peak, the spacecraft reached an altitude of 53.5 miles. It returned to Earth by gliding through the atmosphere and was able to land on the runway of Spaceport America from which it took off earlier.

Virgin Galactic is a speculative, high-risk stock due to the degree of difficulty of commercializing space tourism. However, this is certainly an important milestone but by no means guarantee that investors in the stock will profit. Currently, the company has 600 reservations for future flights, sold at a price between $200,000 and $250,000 each. The company aims to begin commercial service early next year. The company is expected to launch 2 more test spacecraft this year.

Virgin Galactic was founded in 2004 by Branson. However, the company has hit many roadblocks such as a rocket engine explosion in 2007 and the crash of the VSS Enterprise in 2014. It went back to the drawing board by designing additional safety measures and developing the VSS Unity which reached space in 2016. This set the stage for Branson's spaceflight which makes him the first billionaire to reach space, edging out Bezos by a few days.