Shares of spaceflight company Virgin Galactic plunged by nearly 3 percent after its founder Richard Branson sold more of his stake in the company for nearly $300 million to fund his other ventures.
Richard Branson, through his Virgin Investments group, sold 10.4 million shares of Virgin Galactic this week at various prices, ranging from $25.75 to $34.39 a share, according to a Securities and Exchange Commission (SEC) filing on Thursday.
The sale comes a month after the space tourism company completed its first fully crewed test flight into space with Branson on board.
On Wednesday, global financial services firm, Morgan Stanley, downgraded the stock to underweight from equal weight, saying in a note to clients that the excitement around Virgin Galactic should cool off as the flight schedule enters a quieter period. Credit Suisse issued a downgrade on Thursday, saying that the company’s stock has few catalysts over the next year.
Shares of Virgin Galactic fell by 3 percent before making a comeback to trade slightly positive from its previous close of $25.94 a share.
Richard Branson’s Virgin Investments remains the largest shareholder of the space tourism company. The latest sale leaves the founder with about 46.3 million shares worth roughly $1.2 billion as of the stock’s last closing price. He had in April sold stock worth over $150 million.
In a statement, Virgin Galactic said that it “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 impact of the COVID-19 pandemic, in addition to supporting the development and growth of new and existing businesses.”
The stake sale makes it Richard Branson’s third since taking Virgin Galactic public with his earlier sales worth $504.5 million and $150.3 million in May 2020 and April 2021, respectively. Virgin Galactic went public in October 2019 at a $1 billion market capitalization in a Special Purpose Acquisition Company (SPAC) merger with publicly traded Social Capital Hedosophia, run by former Facebook executive Chamath Palihapitiya.
British billionaire Richard Branson has recouped more than $950 million of his investment in the space company through stake sales since taking it public. And according to an SEC filing, the company had raised over $1 billion in investment before going public.