Virgin Galactic stock tanks as chairman cashes out $200 million personal stake

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In an announcement, Chamath Palihapitiya stated he bought off a private funding value about $200 million for “a big funding I’m making in direction of preventing local weather change.” He added that the small print “might be made public within the subsequent few months.”

“I proceed to be a big investor in Virgin Galactic by means of Social Capital Hedosophia Holdings and I stay as devoted as ever to Virgin Galactic’s group, mission and prospects,”

Social Capital Hedosophia is the particular goal acquisition firm, or SPAC, that took Virgin Galactic public final yr. Palihapitiya, a former Fb govt, took on the chairman function at Virgin Galactic after the merger.

Information that Palihapitiya divested his private stake despatched Virgin Galactic shares tumbling as a lot as 14% Friday. That piled on to a multi-day selloff — fueled by traders steering away from tech shares — that induced Virgin Galactic to shed almost a 3rd of its inventory worth. Shares have been buying and selling round $26 per share on Friday, far off the document excessive of greater than $60 per share that it hit in early February.
Virgin Galactic unexpectedly aborts test flight of space plane
Virgin Galactic had been a darling of traders hoping to get in early on the house craze. It turned the primary “new house” firm to listing on the inventory market, and analysts have hailed the corporate for its potential. However extra just lately, Morgan Stanley analyst Adam Jonas warned that it was changing into overvalued.
Throughout its final quarterly earnings report, Virgin Galactic additionally revealed that it probably will not start full business operations earlier than 2022 — one other lengthy delay after years of pledging that milestone was proper across the nook. Three years in the past, for instance, the corporate’s CEO had stated Virgin Galactic was on observe to start business passenger house flights by the top of 2018.

The corporate additionally underwent a big management shakeup just lately. George Whitesides, who served as CEO for years earlier than shifting to the function of “chief house officer” final yr, introduced this week that he’s leaving his submit. Whitesides, a a NASA and FAA veteran, was a longtime public face of the corporate and he even reserved a experience to house on one in all Virgin Galactic’s house planes.

Final month, the Washington Submit, citing an upcoming e-book from New Yorker journalist Nicholas Schmidle, revealed that Virgin Galactic encountered a probably severe security hazard through the firm’s second high-altitude take a look at flight in 2019. A security probe was ordered to analyze why a seal on its house aircraft’s wing had come undone, risking lack of the automobile and the lives of three crew members on board, based on the Submit. Nobody had been harmed within the take a look at flight, which was publicly deemed a hit.

Virgin Galactic didn’t reply to a request for remark in regards to the report on Friday.

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