Virgin Galactic Holdings Inc. tumbled Friday after its billionaire Chairman Chamath Palihapitiya offloaded shares worth about $213 million in the space-tourism company founded by Richard Branson.
Palihapitiya, the investor who has helped drive the frenzied growth of blank-check companies, disposed of 6.2 million shares at an average price of $34.32 this week, based on a filing with the U.S. Securities and Exchange Commission. He still owns 15.8 million shares with his partner Ian Osborne through investment firm Social Capital Hedosophia, amounting to about a 6.5% stake. Palihapitiya previously sold shares worth almost $100 million in December, filings show.
Palihapitiya said he sold the shares to fund an investment to help fight climate change.
“The details of this investment will be made public in the next few months,” he said in a statement Friday. “I remain as dedicated as ever to Virgin Galactic’s team, mission and prospects.”
Virgin Galactic’s shares fell 16% to $25.43 at 11:10 a.m. in New York and have slid more than 55% since their peak in mid-February.
The Las Cruces, New Mexico-based company merged with Social Capital’s first SPAC in 2019. Palihapitiya has since launched blank-check companies that have merged with businesses across health insurance, financial services and real estate including Opendoor Technologies Inc. and Clover Health Investments Corp.
Along the way, 44-year-old Palihapitiya has made a fortune for himself and his investors. The former Facebook Inc. executive has raised more than $4 billion through blank-check firms, using social media to talk up the investments and becoming one of the most prominent figures in the SPAC phenomenon, which has everyone from Colin Kaepernick to former House Speaker Paul Ryan racing to market their own.
He’s also a lightning rod for skeptics who dismiss his success as the product of self-promotion and see blank-check companies as proof of a bubble inflated by government money-printing.
A month ago, Palihapitiya said it would only be under the rarest of circumstances that he’d reduce his holdings of any SPAC.
“If I could really just go for it, I wouldn’t sell a share of anything I buy because I believe in it,” he said Feb. 8 in a interview on Bloomberg Television’s “Front Row.” “But every now and then, I run into liquidity constraints, like everybody else.”