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Virgin Galactic Sued by Investor Over SPAC’s Accounting Issues

  • Space tourism firm’s shares dropped on results restatement
  • Investor is seeking class-action status for lawsuit over loss
HP Virgin Galactic Unity GETTY Sub

Photographer: Gene Blevins/AFP/Getty Images

Virgin Galactic Holdings Inc. was sued by an investor who claims he lost money when the space-tourism company announced that it would restate its results due to regulatory guidance about the accounting treatment of warrants.

The Las Cruces, New Mexico-based company said on April 30 that it would have to restate its 2020 results because of accounting guidance of regulators related to special purpose acquisition companies, or SPACs. The next trading day, its shares fell 9%. The company combined with Social Capital Hedosophia, run by former Facebook executive Chamath Palihapitiya, and went public in October 2019.