Virgin Galactic’s chairman sells all of his stock in the company
Getting out when the getting is good: The chairman of Virgin Galactic who was part of the deal that allowed the company to go public has now sold all of his stock in the company.
Billionaire investor Chamath Palihapitiya sold his entire personal stake in Virgin Galactic this week, a regulatory filing revealed on Friday.
The space-tourism company’s chairman cashed out his 6.2 million shares at an average price of $35, netting him around $211 million. Palihapitiya, along with his business partner Ian Osborne, still indirectly own 15.8 million shares via SCH Sponsor Corp, their investment vehicle.
Palihapitiya previously sold 3.8 million Virgin Galactic shares in December, tweeting that he needed to free up cash to fund several new projects this year.
Like Branson, this guy took the company public, made some absurd claims about its future, got several Wall Street analysts to rave about his plans, and then when the stock was high because of these fake promises, got out. He knows, as did Branson, that Virgin Galactic has practically a zero chance of making a dime in the future. He just worked a con to use it to make him some cash on the backs of a lot of other stock buyers who should have known better.
This company might fly a few paying customers on some suborbital flights, but its long term future is very bleak.
On Christmas Eve 1968 three Americans became the first humans to visit another world. What they did to celebrate was unexpected and profound, and will be remembered throughout all human history. Genesis: the Story of Apollo 8, Robert Zimmerman's classic history of humanity's first journey to another world, tells that story, and it is now available as both an ebook and an audiobook, both with a foreword by Valerie Anders and a new introduction by Robert Zimmerman.
The ebook is available everywhere for $5.99 (before discount) at amazon, or direct from my ebook publisher, ebookit. If you buy it from ebookit you don't support the big tech companies and the author gets a bigger cut much sooner.
The audiobook is also available at all these vendors, and is also free with a 30-day trial membership to Audible.
"Not simply about one mission, [Genesis] is also the history of America's quest for the moon... Zimmerman has done a masterful job of tying disparate events together into a solid account of one of America's greatest human triumphs."--San Antonio Express-News
Getting out when the getting is good: The chairman of Virgin Galactic who was part of the deal that allowed the company to go public has now sold all of his stock in the company.
Billionaire investor Chamath Palihapitiya sold his entire personal stake in Virgin Galactic this week, a regulatory filing revealed on Friday.
The space-tourism company’s chairman cashed out his 6.2 million shares at an average price of $35, netting him around $211 million. Palihapitiya, along with his business partner Ian Osborne, still indirectly own 15.8 million shares via SCH Sponsor Corp, their investment vehicle.
Palihapitiya previously sold 3.8 million Virgin Galactic shares in December, tweeting that he needed to free up cash to fund several new projects this year.
Like Branson, this guy took the company public, made some absurd claims about its future, got several Wall Street analysts to rave about his plans, and then when the stock was high because of these fake promises, got out. He knows, as did Branson, that Virgin Galactic has practically a zero chance of making a dime in the future. He just worked a con to use it to make him some cash on the backs of a lot of other stock buyers who should have known better.
This company might fly a few paying customers on some suborbital flights, but its long term future is very bleak.
On Christmas Eve 1968 three Americans became the first humans to visit another world. What they did to celebrate was unexpected and profound, and will be remembered throughout all human history. Genesis: the Story of Apollo 8, Robert Zimmerman's classic history of humanity's first journey to another world, tells that story, and it is now available as both an ebook and an audiobook, both with a foreword by Valerie Anders and a new introduction by Robert Zimmerman.
The ebook is available everywhere for $5.99 (before discount) at amazon, or direct from my ebook publisher, ebookit. If you buy it from ebookit you don't support the big tech companies and the author gets a bigger cut much sooner.
The audiobook is also available at all these vendors, and is also free with a 30-day trial membership to Audible.
"Not simply about one mission, [Genesis] is also the history of America's quest for the moon... Zimmerman has done a masterful job of tying disparate events together into a solid account of one of America's greatest human triumphs."--San Antonio Express-News
Robert, I first heard you on Coast-to-Coast AM…when you busted my chops for calling this sub-orbital system a joke on air when George Noory took my call.
I hope you can go back on that program. They got rid of Davenport for some reason.
Comment from someone with an an MBA with an emphasis in Accounting and Finance, who worked corporate Finance after retiring from the Army – this sounds like the classic “Pump and Dump”. I think senior company executives should be required to buy and hold a certain percentage of the firm’s shares. And yes, BUY – at market price, no special deals, like discounts., the day they are promoted to senior rank within the firm or the day they join it when they enter at senior level. Should be right there in the company by-laws
For the decoupling of executives’ interests and that of the shareholders see
A THEORY OF LARGE MANAGERIAL FIRMS – The Journal of Political Economy, June 1965
“It was only in the 1960s that the neo-classical theory of the firm was seriously challenged by alternatives such as managerial and behavioral theories. Managerial theories of the firm, as developed by William Baumol (1959 and 1962), Robin Marris (1964) and Oliver E. Williamson (1966), suggest that managers would seek to maximise their own utility and consider the implications of this for firm behavior in contrast to the profit-maximising case. (Baumol suggested that managers’ interests are best served by maximising sales after achieving a minimum level of profit which satisfies shareholders.) More recently this has developed into ‘principal–agent’ analysis (e.g., Spence and Zeckhauser[14] and Ross (1973)[citation needed] on problems of contracting with asymmetric information) which models a widely applicable case where a principal (a shareholder or firm for example) cannot costlessly infer how an agent (a manager or supplier, say) is behaving. This may arise either because the agent has greater expertise or knowledge than the principal, or because the principal cannot directly observe the agent’s actions; it is asymmetric information which leads to a problem of moral hazard. This means that to an extent managers can pursue their own interests. Traditional managerial models typically assume that managers, instead of maximising profit, maximise a simple objective utility function (this may include salary, perks, security, power, prestige) subject to an arbitrarily given profit constraint (profit satisficing).”
https://www.jstor.org/stable/1829037?seq=1
A professional bit of wisdom. In the ‘8o’s you could get red-baited for just suggesting centrist reform. The era you cite from was more sober minded.
Col Beausabre,
A major problem with the idea of requiring senior company executives to buy and hold a certain percentage of the firm’s shares is that this policy limits the pool of executives to only those with money enough to make the purchase. It also creates a barrier for the rest to enter the ranks of executive, limiting the ability of long-time employees from being promoted into the ranks of the company’s executives.
The policy of providing company shares to new executives came about on the theory that executives with an ownership stake in the company would have greater incentive to properly manage the company. The down side is that free or reduced-price shares turn into free money that the executive can take with him after a not-so long stay at the company, even if the company does not prosper, reducing the desired incentive.
A similar system for lower level employees came about by contributing company shares as 401k matching. The down side was that these matching shares lost value if the executives drove the company into bankruptcy. I would have had that happen to me at one company, but I never vested into the matching, having left before the required time — vesting would have occurred after the bankruptcy.
You have to do something to stop the pump and dump. Often times, labor gets blamed for everything. But the scuttlebutt I heard from Hayes Aircraft was than the owners son sold out to pay gambling debt. The boss goofs—and the workers pay for it as you describe. So the need of some regulation. A moral turpitude clause for execs
Jeff Wright wrote: “The boss goofs—and the workers pay for it as you describe. So the need of some regulation. A moral turpitude clause for execs”
Ah, yes. The “companies are for the employees” argument. Companies are created buy the owners for the owners. If an owner is more interested in gambling than running a company, who are we to tell him otherwise? Jeff Wright’s attitude is why we got health insurance mandates, a decade ago, directing us as to how to spend our own money. What other tyranny in all of history was so evil that it coerced its people to spend their own money in a specified way?
When anti-tax types went cheap on infrastructure-we got leaded water in Flint. That hurt people same as hydrocarbon phobia. I want what is best for America, not just corporate types who gave China our jobs-and their allegiance and haven’t been fair to conservatives either as per Tucker Carlson. They don’t have your back. You can be a Patriot without being a John Bircher. Besides-red baiting got old…like Goth:-)