Austin, Texas (CNN Business)Shares of Virgin Galactic (SPCE), the suborbital space tourism venture founded by British billionaire Richard Branson, plummeted Friday after the company’s chairman dumped his personal stake in the company.
In a statement, Chamath Palihapitiya said he sold off a personal investment worth about $200 million for “a large investment I am making towards fighting climate change.” He added that the details “will be made public in the next few months.”
“I continue to be a significant investor in Virgin Galactic through Social Capital Hedosophia Holdings and I remain as dedicated as ever to Virgin Galactic’s team, mission and prospects,”
Social Capital Hedosophia is the special purpose acquisition company, or SPAC, that took Virgin Galactic public last year. Palihapitiya, a former Facebook executive, took on the chairman role at Virgin Galactic after the merger.
News that Palihapitiya divested his personal stake sent Virgin Galactic shares tumbling as much as 14% Friday. That piled on to a multi-day selloff — fueled by investors steering away from tech stocks — that caused Virgin Galactic to shed nearly a third of its stock value. Shares were trading around $26 per share on Friday, far off the record high of more than $60 per share that it hit in early February.
Virgin Galactic had been a darling of investors hoping to get in early on the space craze. It became the first “new space” company to list on the stock market, and analysts have hailed the company for its potential. But more recently, Morgan Stanley analyst Adam Jonas warned that it was becoming overvalued.
During its last quarterly earnings report, Virgin Galactic also revealed that it likely won’t begin full commercial operations before 2022 — another long delay after years of pledging that milestone was right around the corner. Three years ago, for example, the company’s CEO had said Virgin Galactic was on track to begin commercial passenger space flights by the end of 2018.
The company also underwent a significant leadership shakeup recently. George Whitesides, who served as CEO for years before moving to the role of “chief space officer” last year, announced this week that he is leaving his post. Whitesides, a a NASA and FAA veteran, was a longtime public face of the company and he even reserved a ride to space on one of Virgin Galactic’s space planes.
Last month, the Washington Post, citing an upcoming book from New Yorker journalist Nicholas Schmidle, revealed that Virgin Galactic encountered a potentially serious safety hazard during the company’s second high-altitude test flight in 2019. A safety probe was ordered to investigate why a seal on its space plane’s wing had come undone, risking loss of the vehicle and the lives of three crew members on board, according to the Post. No one had been harmed in the test flight, which was publicly deemed a success.
Virgin Galactic did not respond to a request for comment about the report on Friday.