Virgin Galactic tumbles as billionaire chairman Chamath Palihapitya sells $211 million stake

Chamath Palihapitiya
Chamath Palihapitiya

  • Virgin Galactic stock fell as much as 21% Friday after chairman Chamath Palihapitya sold his personal stake. 
  • Palihapitya netted $211 million after selling 6.2 million shares. 
  • The billionaire executive still holds an indirect stake in the space tourism company. 
  •  Visit the Business section of Insider for more stories.

Shares of Virgin Galactic slid by double digits Friday after billionaire chairman Chamath Palihapitiya sold his personal stake in the space-tourism company for $211 million.

Palihapitiya cashed out 6.2 million shares at an average price of $35, according to a filing with the Securities and Exchange Commission.

Virgin Galactic shares dropped as much as 21% as they hit $23.94.  The stock went on to pare the loss to 13% in active trading, with daily volume midday surpassing the average volume of 20.1 million shares. 

Palihapitiya, with his business partner Ian Osborne, still indirectly owns 15.8 million shares via their investment vehicle, SCH Sponsor Corp. Palihapitiya in December sold 3.8 million shares in Virgin Galactic. In a tweet, he had said he needed cash to fund several new projects.

Virgin Galactic, founded by billionaire Richard Branson, went public in October 2019 by merging with Palihapitiya and Osborne’s Social Capital Hedosophia, a special-purpose acquisition vehicle or SPAC.

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Virgin Galactic slips as billionaire chairman Chamath Palihapitya sells $211 million stake

Chamath Palihapitiya
Chamath Palihapitiya

  • Virgin Galactic stock fell by nearly 9% early Friday after chairman Chamath Palihapitya sold his personal stake. 
  • Palihapitya netted $211 million after selling 6.2 million shares. 
  • The billionaire chairman still holds an indirect stake in the space tourism company. 
  •  Visit the Business section of Insider for more stories.

Shares of Virgin Galactic slumped early Friday after billionaire chairman Chamath Palihapitiya sold his personal stake in the space-tourism company for $211 million.

Palihapitiya cashed out 6.2 million shares at an average price of $35, according to a filing with the Securities and Exchange Commission.

Virgin Galactic shares dropped as much as 8.7% as they hit $27.66 in heavy volume during premarket trade. The stock later pared the loss to 6.7%.

Palihapitiya, with his business partner Ian Osborne, still indirectly own 15.8 million shares via their investment vehicle, SCH Sponsor Corp. Palihapitiya in December sold 3.8 million shares in Virgin Galactic. In a tweet, he had said he needed cash to fund several new projects.

Virgin Galactic, founded by billionaire Richard Branson, went public in October 2019 by merging with Palihapitiya and Osborne’s Social Capital Hedosophia, a special-purpose acquisition vehicle or SPAC.

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Virgin Galactic slides 6% as investors look to sell 113 million shares

spaceshiptwo unity first free flight new mexico spaceport america runway landing virgin galactic may 2020
Virgin Galactic’s SpaceShipTwo “Unity” lands on a runway at Spaceport America in New Mexico on May 1, 2020.

  • Virgin Galactic fell as much as 6% on Friday after shareholders filed to sell up to 113 million shares.
  • Shareholders aim to sell up to roughly 105 million outstanding shares of common stock and up to 8 million shares of common stock issuable upon the exercise of warrants, according to a Securities and Exchange Commission filing published Thursday.
  • The filing doesn’t specify when the selling could begin.
  • The filing comes as shares sit roughly 120% higher year-to-date.
  • Watch Virgin Galactic trade live here.

Virgin Galactic tumbled as much as 6% on Friday after shareholders moved to sell up to 113 million shares.

In a Securities and Exchange Commission filing published Thursday, stockholders announced efforts to resell up to about 105 million outstanding shares of common stock and up to 8 million shares of common stock issuable upon the exercise of warrants. Virgin Galactic won’t receive any of the proceeds from the sale. The filing doesn’t specify when the selling could begin.

The resale efforts come as Virgin Galactic shares sit about 120% higher year-to-date. 

Read more: 3 ETF executives break down the various ways to invest early in the global 5G boom as it grows to unlock $13.2 trillion in value by 2035

Shares recently weathered stronger volatility as the company prepares for its first manned test flight out of Spaceport America in New Mexico. The stock rallied to a 9-month high on December 7 as investors bet on a successful test, but rocket engine issues postponed the flight and dragged shares as much as 17% lower on December 14.

“Virgin Galactic is now conducting post-flight analysis and can so far report that the onboard computer which monitors the propulsion system lost connection, triggering a fail-safe scenario that intentionally halted ignition of the rocket motor,” the company said in a statement.

It’s unclear when the test flight will be rescheduled. The initial plans to hold the test in November were already delayed once after rising COVID-19 cases in New Mexico squandered launch efforts.

Virgin Galactic closed at $25.50 on Thursday. The company has five “buy” ratings and four “hold” ratings from analysts, with a consensus price target of $24.56.

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SPCE

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Virgin Galactic falls 17% after aborting key flight test as rocket engine fails to ignite

FILE PHOTO: Virgin Galactic (SPCE) logo is displayed on a screen on the floor of the New York Stock Exchange (NYSE) as the company begins public trading in New York, U.S., October 28, 2019. REUTERS/Brendan McDermid
Virgin Galactic (SPCE) logo is displayed on a screen on the floor of the NYSE in New York

  • Shares of Virgin Galactic tumbled as much as 17% to $26 on Monday after a test flight over the weekend failed to reach outer space due to rocket engine ignition issues.
  • “Virgin Galactic is now conducting post flight analysis and can so far report that the onboard computer which monitors the propulsion system lost connection, triggering a fail-safe scenario that intentionally halted ignition of the rocket motor,” the company said in a statement.
  • Test pilots flew back to the Spaceport America launch site in New Mexico and landed safely. It’s unclear when Virgin Galactic’s next test flight will be. 
  • Visit Business Insider’s homepage for more stories.

Shares of Virgin Galactic tumbled as much as 17% on Monday after its first manned test flight on Saturday failed to reach outer space as planned. The rocket motor that is supposed to propel the craft into space failed to ignite, causing the test pilots to fly back to the Spaceport America launch site in New Mexico and land safely.

“During the test flight, the rocket motor did not fire due to the ignition sequence not completing,” the company said in a Monday statement. “Virgin Galactic is now conducting post flight analysis and can so far report that the onboard computer which monitors the propulsion system lost connection, triggering a fail-safe scenario that intentionally halted ignition of the rocket motor. ” 

Shares slumped to as low as $26 Monday morning after closing at $32 on Friday. The stock has been climbing steadily since the beginning of November and hit its highest level since late February last Monday, when the company signaled the critical test flight was almost ready to launch. 

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It’s unclear when Virgin Galactic’s next attempt at a powered flight to space will be. 

The spaceflight company tweeted on Saturday: “As we do with every test flight, we are evaluating all the data, including the root cause assessment of the computer communication loss.  We look forward to sharing information on our next flight window in the near future.” 

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