Virgin Galactic shares tumble after chairman sells $213 million stake

Virgin Galactic Holdings tumbled Friday following its billionaire chairman Chamath Palihapitiya offloaded shares well worth about $213 million found in the space-tourism organization founded by Richard Branson.

Mr Palihapitiya, who has helped get the frenzied expansion of blank-cheque companies, removed 6.2 million shares at the average price of $34.32 this week, based on a filing with the US Securities and Exchange Commission. He still owns 15.8 million shares along with his spouse Ian Osborne through expense firm Public Capital Hedosophia, amounting to in regards to a 6.5 % stake. Mr Palihapitiya previously purchased shares worth nearly $100m in December, filings express.

Mr Palihapitiya said he sold the shares to invest in an investment to greatly help fight climate change.

“The details of the investment will be made public within the next couple of months,” he said in a statement Friday. “I remain as focused as ever to Virgin Galactic’s workforce, mission and prospects.”

Virgin Galactic’s shares fell 9.9 % to $27.29 in New York on Friday and have slid a lot more than 50 % since their peak in mid-February.

The Las Cruces, New Mexico-based company merged with Community Capital’s first SPAC in 2019. Mr Palihapitiya possesses since launched blank-cheque corporations that contain merged with businesses across health insurance, financial providers and real estate incorporating Opendoor Technologies and Clover Health and wellbeing Investments.

Opendoor fell 9.8 per cent on Friday, while Clover Health rose 7.5 % after earlier sliding. Additional Mr Palihapitiya SPACs such as for example Community Capital Hedosophia Holdings IV and V reversed midday losses to wrap up for the day.

Mr Palihapitiya, 44, has made a lot of money for himself and his investors through SPACs. The past Facebook executive has raised a lot more than $4 billion via blank-cheque companies, using social mass media to chat up the investments and being just about the most prominent numbers in the phenomenon, which includes everyone from Colin Kaepernick to ex - House Loudspeaker Paul Ryan racing to market their own.

He’s also a lightning rod for skeptics who dismiss his achievements as the merchandise of self-promotion and check out blank-check companies as proof of a good bubble inflated by government money-printing.

Per month ago, Mr Palihapitiya said it could only be beneath the rarest of circumstances that he’d reduce his holdings of any SPAC.

“If I could really just do it now, I wouldn’t sell a show of anything I buy because I believe in it,” he said February 8 in a interview on Bloomberg Television’s “Front Row.” “But every now and then, I come across liquidity constraints, like everybody else.”

At the time, Mr Palihapitiya had merely lately sold 3.8 million Virgin Galactic shares. He explained he did so because his family workplace called needing money for other purposes.

Community Capital’s merger with Virgin Galactic - where Palihapitiya is going to be chairman - made the startup the world’s initial publicly traded space-travel venture. The transaction raised about $800 million, with Mr Palihapitiya also immediately contributing $100m.

As the shares surged in the wake of the listing, they have tumbled since a February decision to delay another flight to space. The new schedule also pushed again plans to transport Mr Branson, 70, on another objective before Virgin Galactic is definitely likely to take its first flight with passengers spending money on the trip.

The company on Thursday announced the departure of its chief space officer, George Whitesides, saying he has made a decision to pursue potential opportunities in public service. Mr Whitesides, who served as leader for ten years until July 2020, will stay chairman of a four-person Space Advisory Board. Swami Iyer is joining Virgin Galactic later this month as president of aerospace systems.

Though Virgin Galactic has a huge selection of clients prearranged to pay at least $250,000 for a 90-minute flight to the edge of space, it has been a gradual journey because the venture was founded in 2004. Plans were put on hold for four years in 2014 after an area plane split up mid-airline flight, eliminating one pilot and injuring another.