Virgin Galactic drops 20% on Friday after Chamath Palihapitiya dumps his $213 million personal stake
Virgin Galactic leaders in front of the New York Stock Exchange, from left: CEO George Whitesides, founder Richard Branson and Chairman Chamath Palihapitiya.
Billionaire investor Chamath Palihapitiya, the chairman of Virgin Galactic who took the company public through a SPAC deal in 2019, sold his remaining personal stake earlier this week, a securities filing disclosed.
Palihapitiya sold about 6.2 million Virgin Galactic shares on Tuesday and Wednesday, worth about $213 million at the average selling prices.
While he now owns about 15.8 million shares, the stake he sold represented all of the Virgin Galactic stock that Palihapitiya owned directly. His remaining shares are owned indirectly, through Social Capital Hedosophia Holdings – the special purpose acquisition company, or SPAC, that Palihapitiya formed with fellow investor Ian Osborne.
Virgin Galactic and Palihapitiya did not immediately respond to CNBC’s requests for comment.
Shares of Virgin Galactic slipped about 3% in premarket trading from its previous close of $30.30 a share. The company’s stock has lost more than half its value since hitting an all time high of $62.80 a share in early February, although it remains up more than 28% since the beginning of the year.
The shares are down more than 18% this week alone.
Virgin Galactic’s carrier jet and spacecraft prepare to takeoff from Spaceport America in New Mexico on Dec. 12, 2020.
Palihapitiya in December sold about 3.8 million shares of his stake in Virgin Galactic. At the time, Palihapitiya said that he sold the shares “to help manage my liquidity as I fund several new projects starting in 2021.”
“I remain committed and excited for the future of SPCE. Just wanted to be transparent,” Palihapitiya said in a tweet.
His sales come a week after Virgin Galactic revealed further delays to its spacecraft testing program, saying that it now does not expect commercial flights to begin until early 2022. When Palihapitiya’s SPAC merged with Sir Richard Branson’s company, Virgin Galactic said it expected commercial spaceflights to begin by the summer of 2020.
Additionally, former Virgin Galactic CEO George Whitesides, who currently serves as the company’s chief space officer, is stepping down from the company, a spokesperson told CNBC on Wednesday. Whitesides, who last year stepped aside as CEO for former Disney executive Michael Colglazier, plans to explore opportunities in public service, the company said.
Whitesides will remain as chair of Virgin Galactic’s Space Advisory Board, and both he and his wife hold spaceflight tickets bought in 2005.
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