Topline
Chamath Palihapitiya, the so-called SPAC King whose investment firm helped take Virgin Galactic public in 2019, abruptly resigned from his position as the British-American aerospace company’s board chair on Thursday, leaving the firm amid an eight-month stock rout that’s seen shares tumble more than 80%.
Founder and CEO of Social Capital, Chamath Palihapitiya in October 2016.
Key Facts
Virgin Galactic, which was founded by billionaire Sir Richard Branson in 2004, announced the resignation in a Friday morning regulatory filing, claiming Palihapitiya’s departure did not result from any disagreements with the company and that the 45-year-old would instead “pursue other opportunities.”
Upon Palihapitiya’s resignation, which was effective immediately, board member Evan Lovell, a longtime partner at Branson’s conglomerate Virgin Group, was appointed to serve as interim chair until a permanent replacement has been identified and appointed, the firm said.
In a statement, Virgin Galactic CEO Michael Colglazier said the firm has “always known the time would come” Palihapitiya, whose investment firm Social Capital has taken a slew of companies public, would pursue new opportunities.
Palihapitiya’s departure comes about a year after he sold his remaining personal stake in the firm for more than $200 million and also follows a dismal stretch for Virgin Galactic shares, which have plummeted roughly 80% from an all-time high of $57.51 in June, when investors plowed into the stock amid anticipation of Branson’s historic first trip to space.
Shares of Virgin Galactic pared early morning gains following the announcement, trading about 0.2% above Thursday’s closing price of $9.01 before the market opened.
Key Background
Virgin Galactic shares have been on a wild ride during the pandemic. The stock nearly tripled as retail investors plowed into heavily shorted stocks last year (a frenzy that helped Palihapitiya regain billionaire status), but then tumbled as the fervor wore off in recent months. The burgeoning industry around space exploration has also been volatile, albeit to a lesser degree. The $21 million S&P Kensho Final Frontiers ETF, whose top holdings include Virgin Galactic, Maxar Technologies and Lockheed Martin, has fallen nearly 15% from an all-time high set last summer.
Further Reading
Virgin Galactic Shares Surge 30% After Billionaire Branson-Backed Firm Announces $450,000 Tickets To Space (Forbes)
‘SPAC King’ Regains Billionaire Status As Trading Frenzy Boosts Clover Health
Chamath Palihapitiya’s Clover Health Discloses New SEC Investigation And Responds To Short-Seller’s Scathing Allegations (Forbes)
Source: https://www.forbes.com/sites/jonathanponciano/2022/02/18/spac-king-chamath-palihapitiya-abruptly-resigns-as-virgin-galactic-chair-amid-stock-crash/