Whitesides reportedly steps down as Virgin Galactic stock price crashes

Mar. 5—ALBUQUERQUE, N.M. — Longtime Virgin Galactic executive George Whitesides apparently resigned Friday from his position as chief space officer amid a rapid decline in the company's stock price and a massive sell off of shares by company Chairman Chamath Palihapitiya.

The company has yet to officially confirm Whitesides' departure. Online publication SpaceNews announced the resignation Friday morning after receiving an email confirmation from Whitesides that said he was leaving but would still serve as chair of Virgin Galactic's newly formed Space Advisory Board.

Whitesides served as Virgin Galactic CEO from 2010 until last summer, when he stepped aside for former Disney executive Michael Colglazier to take the reins. Whitesides then became chief space office, a new position created by the company at that time.

Whitesides did not respond to phone and text messages by the Journal. Rich Smith, a writer for the investor advisory service The Motley Fool, who follows Virgin Galactic shares on the New York Stock Exchange, said the company has yet to respond to his request for confirmation as well.

"Whitesides is no longer on the company web page where they list their senior executives," Smith told the Journal. "He was listed in the No. 2 spot, but he's no longer is, so that may be instructional."

News of Whitesides' departure comes alongside a Securities Exchange Commission regulatory filing, made public Friday, that says Virgin Galactic Chairman Palihapitiya sold off all of his personal stake in the company this week. That amounted to 6.2 million shares, valued at about $213 million at an average price of $34.32 per share this week.

Palihapitiya still indirectly owns 15.8 million shares in Virgin Galactic with his partner, Ian Osborne, through investment firm Social Capital Hedosophia, amounting to about a 6.5% stake, according to a Bloomberg report Friday morning. Virgin Galactic went public in 2019 on the NYSE through a merger with Hedosophia, a special purpose acquisition company formed by Palihapitiya and Osborne.

Palihapitiya, a former Facebook Inc. executive and billionaire investor, had already sold 3.8 million shares from his personal stake in Virgin Galactic in December, worth about $100 million at that time. Palihapitiya told CNBC in a statement Friday morning that he'll use the cash from the sale of his stock for a large investment in another venture that's not yet been announced publicly.

"I remain as dedicated as ever to Virgin Galactic's team, mission and prospects," Palihapitiya said in his statement to CNBC.

The chairman's personal divestment, however, comes amid a crash in Virgin Galactic's stock price following the company's announcement in February that it would postpone its next effort to reach space in test flights from Spaceport America in southern New Mexico until May. That sets the company's launch of space tourism operations back by at least six months, with full commercial operations unlikely to begin until 2022.

The company's stock price was at $24.95 a share as of 12:50 PM Eastern Time, down from a record high of $62.80 in early February, before the company announced postponement of its next spaceship test flight.