Virgin Galactic chairman sells $213 million stake

Virgin Galactic Holdings Inc. Chairman Chamath Palihapitiya sold his personal holding in the space-tourism company founded by Richard Branson, raising $213 million (Dh782 million).

The Sri Lanka-born businessman disposed of 6.2 million shares at an average price of $34.32 this week, based on a filing with the US Securities & Exchange Commission. He still owns 15.8 million shares with his investment partner Ian Osborne, amounting to a 6.2 per cent stake.

Palihapitiya, 44, and Osborne helped to kick-start the booming Wall Street trend of special-purpose acquisition vehicles, through New York investment firm Social Capital Hedosophia. Its initial SPAC merged with Virgin Galactic in 2019 in a deal that made the Branson startup the world’s first publicly traded space-travel venture.

Now dozens of firms, from online retailers to air taxis to home insurance, are merging into SPACS, so-called blank check companies that are listed publicly before merging with an operating business. Social Capital’s latest initiatives include Opendoor Technologies Inc., a company that buys, refurbishes and sells homes.

The Virgin Galactic SPAC transaction raised about $800 million, with Palihapitiya also directly contributing $100 million.

Share drop

While the shares surged in the wake of the listing, they have dropped 49 per cent since a February decision to delay the next flight to space. The new schedule also pushed back plans to carry Branson, 70, on a separate mission in the first quarter. Virgin Galactic has a current market value of $7.18 billion.

The company on Thursday announced the departure of its chief space officer, George Whitesides, saying he has decided to pursue potential opportunities in public service. Whitesides, who served as chief executive officer for a decade until July 2020, will remain chairman of a four-person Space Advisory Board.

Though Virgin Galactic has hundreds of clients lined up to pay at least $250,000 for a 90-minute flight to the edge of space, it’s been a slow journey since the venture was founded in 2004. Plans were put on hold for four years in 2014 after a space-plane broke up mid-flight, killing one pilot and injuring another.