Shares of Virgin Galactic Holdings (SPCE 4.32%) traded down more than 8% on Thursday morning following news that company founder Richard Branson has sold down part of his stake in the space tourism company.
Last month Virgin Galactic shares came under pressure after chairman Chamath Palihapitiya disclosed he sold about $213 million worth of the stock. Now, another big-name insider is trimming his holdings.
Richard Branson disclosed late Wednesday he had sold more than $150 million worth of Virgin Galactic stock in recent days. Branson sold about $300 million worth last year to help support his Virgin Atlantic Airways during the COVID-19 crisis, and the billionaire investor is again tapping the space tourism start-up for funds.
The sales come at an uneasy time for Virgin Galactic. The company went public in 2019 via a merger with a Palihapitiya-backed special purpose acquisition company and has been well received on Wall Street, but the company missed its goal to begin service in 2020 and has faced a series of testing setbacks.
It's worth noting that Branson isn't giving up on Virgin Galactic by any means. Through affiliates Branson still owns about 24% of the stock.
The sales mean more shares are available to be traded, which could have at least some initial downward pressure on the price, but for long-term holders none of it matters relative to Virgin Galactic getting its service going. The company has a roster of clients signed up to pay $250,000 apiece for a brief trip into space. Ultimately, the fate of this stock rests on whether or not Virgin Galactic can get them there.