Richard Branson dumps shares
Virgin Galactic is falling back down to earth, erasing its 2021 gains with a 12% loss following news that founder Richard Branson just dumped $150 million in shares.
Sir Richard Branson, who already controls the rest of the Virgin group, took the space tourism company (which has yet to take a tourist to space) public in 2019 through a SPAC merger with Chamath Palihapitiya’s venture Social Capital Hedosophia. But the billionaire is having to tap back into his biggest listed asset to prop up his Virgin empire during COVID-19. Branson sold over $150 million worth of stock over the past week, adding to the $500 million he dumped last year in the face of the pandemic.
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
Virgin Group said.
The whole group has taken a hit, with its airlines getting the worst of it – Virgin Atlantic was forced to cut 3,500 of its 10,000 employees, although it did receive a £1.2 billion rescue plan that should help secure its future.
Branson isn’t the only exec who has reduced his stake in Virgin Galactic though. In early March, chairman Chamath Palihapitiya sold his entire remaining stake for over $200 million to invest in climate change technology. Prices were already feeling the pressure last week, down almost 10% at the start after one of its main competitors, Jeff Bezos’ private space company Blue Origin, launched and landed the 15th successful test flight of its New Shepard rocket booster and capsule.
Virgin Galactic has plans to fly Richard Branson into space in early 2021, but announced on its most recent earnings call that it had postponed its commercial space travel until 2022. All is not lost though, as the company already has a backlog of around 600 customer reservations for tickets (sold for up to $250,000 per person) and has started taking deposits, so clearly people are full of faith.
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 than what we have with Unity
said CEO Michael Colglazier.
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