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Earlier this week, Branson sold 5,584,000 shares of his company between April 12 and 14. According to SEC filing, the shares were worth approximately $150.3 million.
Virgin Galactic Holdings Inc (NYSE: SPCE) stock closed yesterday trading at $23.06, down more than 13%. As a result of the continued decline, all the gains that accumulated in the past 12 months have been wiped out. Yesterday’s dip was attributed to news that Richard Branson, the company’s founder dumped more stocks to the secondary market.
The American spaceflight company has significantly struggled in the stock market in the past few months. According to market data provided by MarketWatch, Virgin Galactic stock has dropped approximately 24%, 30%, and 21% in the past three months, one month and five days respectively through Thursday. Having gained approximately 22% last year, SPCE stock investors are now counting losses. The company has a reported market valuation of approximately $6.78 billion with 234.34 million outstanding shares.
Speaking to media outlet CNBC, the company’s spokesperson indicated that the firm intends to use the proceeds from Branson’s sale to support the company’s portfolio amid covid constraints.
“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. The Virgin Group continues to be the largest shareholder in Virgin Galactic,” Virgin Galactic spokesperson noted.
Virgin Galactic (SPCE) Stock and the Market Outlook
Earlier this week, Branson sold 5,584,000 shares of his company between April 12 and 14. According to SEC filing, the shares were worth approximately $150.3 million as they were sold at prices between $26.85 and $28.73.
Notably, the company’s chairman Chamath Palihapitiya sold his remaining stake in the company last month. Reportedly, Palihapitiya sold approximately 6.2 million SPCE shares worth about $213 million at the time. He noted that the proceeds will be redirected towards investment in combating climate change.
Late last year, Palihapitiya sold approximately 3.8 million SPCE shares in a bid to manage his other projects.
Virgin Galactic has postponed several test flights and delayed the launch date for passengers’ flight. Recently, the company unveiled a sleek SpaceShip III with the test flight intended to take place next month. However, the SpaceShip III is expected to open for the public early next year.
Notably, Virgin Galactic is offering the public a chance to become private astronauts at a price of $250,000. However, Branson noted the price will definitely drop in the long term.
Virgin Galactic is facing fierce competition from Jeff Bezos-backed Blue Origin. Notably, Blue Origin recently launched an unpiloted New Shepard capsule on a suborbital test flight. However, Blue Origin has not yet set out the timeline for passenger flights.