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Richard Branson will sell the Virgin Galactic shares “from time to time by means of ordinary brokers’ transactions.” Credit Suisse Group AG will manage the sale.
The British billionaire and Virgin Group founder Richard Branson is going to sell his shares in Virgin Galactic Holdings Inc (NYSE: SPCE) and realize $500 million. The money received will be used to support Branson’s other businesses. First of all, it regards his airline company that is currently under pressure.
Richar Branson owns 92.6 million shares in Virgin Galactic, worth about $1.9 billion. According to the company’s statement, he will sell up to 25 million shares of the space tourism company, or 22% of his total stake.
Virgin Galactic stated:
“Virgin intends to use any proceeds to support its portfolio of global leisure, holiday and travel businesses that have been affected by the unprecedented impact of COVID-19.”
As the company explained, Branson will sell the shares “from time to time by means of ordinary brokers’ transactions.” Credit Suisse Group AG will manage the sale.
Branson to Rescue Virgin Atlantic Airways
Branson has decided to sell his Virgin Galactic shares to support another company in Virgin Group — Virgin Atlantic Airways. The company has been in trouble because of the coronavirus pandemic. In April, Branson asked the British government for £500 million to support the ailing airline business. In a letter to shareholders, he said that both Virgin Atlantic and Virgin Australia needed a loan from the UK government. Besides, he offered his private Caribbean island of Necker as collateral for any taxpayer cash used to save the airline. The island is estimated by Forbes to be worth £80 million. In addition, Branson has been looking for outside investors for the airline, while weighing an infusion of his own funds.
“The reality of this unprecedented crisis is that many airlines around the world need government support and many have already received it. Without it there won’t be any competition left and hundreds of thousands more jobs will be lost, along with critical connectivity and huge economic value. Virgin Atlantic started with one plane 36 years ago. Over those years it has created real competition for British Airways, which must remain fierce for the benefit of our wonderful customers and the public at large.”
The airline wanted a total of £500m in commercial loans and guarantees. However, the government rejected the request and told the airline to first seek support elsewhere.
SPCE Stock Down
Following the news about Virgin Galactic shares sale, Virgin Galactic (SPCE) stock has fallen. On May 8, it closed at $20.18 but has slightly dropped. In the pre-market today, it was 5.15% down. The opening price of Virgin Galactic stock today made up $19.71 today. At the moment of writing, Virginia Galactic shares are trading at $19.37, or 3.92% down.
At the beginning of 2020, the SPCE stock price soared 270% by mid-February as investors rushed to buy the shares. But the global market correction led to the SPCE stock touching $11 levels by mid-March.
The company’s market cap is $4.102 billion.