Sri Lankan American Businessman Chamath Palihapitiya Resigns as Chairman of Virgin Galactic’s Board of Directors
- He played a pivotal figure in taking the space travel company founded by British billionaire Richard Branson, public in 2019 via a SPAC, or special purpose acquisition company.
Businessman and investor Chamath Palihapitiya has stepped down as chairman of Virgin Galactic’s board of directors. The Sri Lankan American’s SPAC, or special purpose acquisition company, took the space-tourism company public in October 2019.
In a statement announcing the departure in a statement last week, Virgin Galactic CEO Michael Colglazier said he was leaving to “focus on other public company board commitments.” He said the company had “always known the time would come when [Palihapitiya] would shift his focus to new projects and pursuits.”
Palihapitiya was a pivotal figure in taking Virgin Galactic, a space travel company founded by British billionaire Richard Branson, public in 2019 via a SPAC, or special purpose acquisition company. He had stayed on as the company’s inaugural chairman since it went public. SPAC has no business operations and is formed only to raise capital through an initial public offering, capital that can then be used to buy out or merge with another company that is also trying to go public.
The resignation comes barely a month after Palihapitiya made controversial comments on the persecution of ethnic Uyghurs in western China’s Xinjiang province. “Nobody cares about what’s happening to the Uyghurs, okay?” Palihapitiya said on Jason Carlacas’s podcast in January. “Of all the things I care about, yes it is below my line.”
Shortly after the comment, Virgin Galactic distanced itself from Palihapitiya. “Chamath Palihapitiya’s comments do not reflect the views of Virgin Galactic and he does not speak on behalf of the company,” a spokesperson told Fortune magazine at the time.
Similarly, the Golden State Warriors also separated from him. Palihapitiya sits on the board of the basketball team, and “holds a stake that may be as large as 10 percent,” Fortune said. “As a limited investor who has no day-to-day operating functions with the Warriors, Mr. Palihapitiya does not speak on behalf of our franchise, and his views certainly don’t reflect those of our organization,” the San Francisco NBA team said shortly after the controversy, according to CNBC.
In January, Palihapitiya predicted that developing blockchain and DeFi initiatives will oust Visa and Mastercard, two of the largest payment processors. The Sri Lankan American billionaire made the prediction during an episode of the “All-In Podcast” which he co-hosts with industry veterans, degenerate gamblers and besties,” Jason Calacanis, David Sacks and David FriedbergIn the Dec. 29 episode, the four hosts weighed in on their predictions for 2022 on business, politics, science, tech, and crypto. “My biggest business loser for 2022 is Visa and MasterCard, traditional payment rails, and the entire ecosystem around it,” Palihapitiya said, adding that the world’s long-standing payment systems are a “totally constructed duopoly that doesn’t need to exist.”
He said his forecast was based on Amazon’s decision last month to prohibit the use of Visa credit cards in the United Kingdom due to excessive transaction costs. Both Visa and Mastercard have been underperformers in 2021, with stock values nearly flat year-to-date compared to the S&P 500’s almost 27 percent increase.
A former Facebook executive, Palihapitiya is CEO of Social Capital, a Menlo Park-based venture capital firm which he founded in 2011 to invest in companies in fields being ignored by other venture capitalists, like health, financial services, and education. The firm has since expanded to also invest in tech companies like Amazon, Tesla, and Slack. In 2018, Palihapitiya closed his VC funds to new investors.
The 45-year-old, who often describes himself as the Warren Buffett of the new generation, is one of the main proponents of SPAC (Special-Purpose Acquisition Companies), one of the hottest trends among dealmakers in Silicon Valley. Through his SPAC group Social Capital Hedosophia, Palihapitiya has sponsored six such companies, raised a total of $4.34 billion, and acquired businesses across several sectors including space travel, health insurance, financial services and real estate. Through Social Capital Hedosophia Holdings I, he took Virgin Galactic public and made it the first listed human spaceflight company. In January 2021, Social Capital filed for seven new SPACs. His extensive investments in them gained him the nickname of “SPAC king” during the pandemic.
Before founding Social Capital, he served on Facebook’s senior management team in several capacities, most recently as the vice president of User Growth, Mobile & International. During his four years at the company, he is credited with helping orchestrate the social media platform’s massive growth. Before that, he worked at AOL and became the company’s youngest vice president while heading AOL’s Instant Messenger division. Palihapitiya first entered the venture capital world in 2006 as a principal at Mayfield Fund.
Born in Sri Lanka, Palihapitiya moved with his family to Canada at age 6. He attended Lisgar Collegiate Institute and graduated at the age of 17. After graduating from the University of Waterloo in 1999 with a degree in electrical engineering, he worked for a year as a derivatives trader at the investment bank BMO Nesbitt Burns.
He moved to California to be with his then-girlfriend, Brigette Lau, and they later married. In 2018, he filed for divorce. He currently lives in California with his girlfriend Nathalie Dompe, an Italian pharmaceutical heiress and model.
A poker player of international repute, he has three World Series of Poker (WSOP) and two World Poker Tour (WPT) wins. In 2011, he finished 101st out of 6,865 entries in the World Series of Poker’s Main Event.
(Top photo, Virgin Galactic leaders founder Richard Branson and Chairman Chamath Palihapitiya in front of New York Stock Exchange earlier this month. Courtesy Virgin Galactic)