Virgin Galactic (SPCE) Plunges 4% as Founder Richard Branson Sells Over $150 Million in Stock
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Shares of Virgin Galactic (NYSE: SPCE) are trading over 4% lower in pre-open Thursday on news that founder Richard Branson sold over $150 million in stock in the past three days through his Virgin Group business.
The SEC filing shows that Branson sold 5,584,000 shares of SPCE between Monday and Wednesday this week. He was selling at prices between $26.85 and $28.73 to generate returns of $150.3 million. Shares were sold in the open market via a 10b5-1 Plan.
Shares of the company have been trading in a continuous downtrend this year. A low for the year comes at $23.94, representing a decrease of about 60% compared to the all-time high of $62.80 set just four weeks earlier.
On Wednesday, shares closed at $26.68 up 12% for the year.
This news comes after Chamath Palihapitiya, the chairman of Virgin Galactic, sold about 6.2 million SPCE shares worth about $213 million at the average selling prices. He justified the sale by saying he needed “to help manage liquidity as I fund several new projects starting in 2021.”
A year ago, Branson sold a stake worth $504.5 million, which was less than a quarter of his total stake at that time.
Discussing the business lately, CEO Michael Colglazier told CNBC:
“For us to make the business start to scale, at the places that we’re aspiring towards, we need two things: We need many more ships than we have right now and we also need the ships that we bring forward to be built in a way that they’re able to be maintained in a way that we can have much quicker [turnaround times between flights] than what we have with Unity.”
Virgin Group said the proceeds from the share sale will be used to support Virgin Group’s portfolio of businesses that continue to be impacted by COVID-19, in addition to supporting the development and growth of new and existing businesses.
“Virgin intends to use the net proceeds from this sale to support its portfolio of global leisure, holiday and travel businesses that continue to be affected by the unprecedented impact of COVID-19, in addition to supporting the development and growth of new and existing businesses," a Virgin Group spokesperson confirmed. "The Virgin Group continues to be the largest shareholder in Virgin Galactic.”
(updated 11:39AM ET to add Virgin Group statement)
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