Virgin Galactic chairman sold off more than $210 million worth of stock as prices plunged

Virgin Galactic Holdings Inc. Chairman Chamath Palihapitiya sold off a chunk of his shares this week, and played a part of the plunge in prices.

The spaceflight company disclosed late Thursday that Palihapitiya sold a total of 6.2 million shares in the open market to raise $212,771,951. The sales included 3.1 million shares for $109,373,249 on March 2 and 3.1 million shares for $103,389,702 on March 3.

Based on a MarketWatch calculation of data from a Form 4 filing with the Securities and Exchange Commission, the weighted average price of the sales was $34.3181, including $35.2817 on March 2 and $33.3544 on March 3.

Palihapitiya’s sales came as the stock tumbled 11.5% on March 2 to $33.77 and dropped 5.2% on March 3 to $32.03, before falling another 5.4% on March 4 to $30.30.

In an emailed statement to MarketWatch, Palihapitiya said he will use the money raised from the share sales to make a “large investment” to fight climate change, details of which will be made public in the next few months.

“I remain dedicated as ever to Virgin Galactic’s team, mission and prospects,” Palihapitiya said.

Palihapitiya still owned a large stake in Virgin Galactic. In the 10-K annual report filed on March 1, the company said Palihapitiya owned 37.95 million shares, or 15.5% of the shares outstanding.

Subtracting the latest sales indicates he still owns 13.4% of the shares outstanding, which at current prices would be valued at about $865.2 million.

FactSet, MarketWatch

On Friday, the stock SPCE, -16.96% dropped 10.1% in in morning trading, which brings the losses over the past four days to 28.6%.

The stock’s weakness this week comes after the company reported after last Thursday’s close a narrower-than-expected fourth-quarter loss, but said the COVID-19 pandemic continued to put pressure on its space-tourism business.

Palihapitiya’s trades were a big part of the trading volume

Trading volume in Virgin Galactic shares was 14.8 million shares on March 2 and 18.3 million shares on March 3, according to FactSet. That means the dollar volume of trading over those two days was about $1.09 billion, based on closing prices. That suggests Palihapitiya’s sales accounted for about one-fifth of the dollar volume of sales over those two days.

Virgin Galactic’s stock has now lost 5.2% over the past three months, but has advanced 13.1% over the past 12 months. In comparison, the S&P 500 index SPX, -0.24% has tacked on 2.5% the past three months and climbed 25.3% the past year.

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