Please ensure Javascript is enabled for purposes of website accessibility

Why Virgin Galactic Stock Is Falling Today

By Lou Whiteman - Apr 15, 2021 at 10:14AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Richard Branson has sold part of his stake.

What happened

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.

So what

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.

Virgin Galactic's Unity spaceship tethered to its launch ship.

Image source: Virgin Galactic 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.

Now what

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.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Virgin Galactic Holdings, Inc. Stock Quote
Virgin Galactic Holdings, Inc.
$6.28 (4.32%) $0.26

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/05/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.