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Virgin Galactic Holdings, Inc. Class Action Lawsuit

Company Name
Virgin Galactic Holdings, Inc.
Stock Symbol
SPCE
Class Period
October 26, 2019 to April 30, 2021
Motion Deadline
July 27, 2021
Court
Eastern District of New York
39 days left to seek lead plaintiff status

Case Summary

The Virgin Galactic Holdings, Inc. class action lawsuit charges Virgin Galactic and certain of its top executives with violations of the Securities Exchange Act of 1934 and seeks to represent purchasers of Virgin Galactic securities between October 26, 2019 and April 30, 2021, inclusive (the “Class Period”).  The Virgin Galactic class action lawsuit was commenced on May 28, 2021 in the Eastern District of New York and is captioned Lavin v. Virgin Galactic Holdings, Inc., No. 21-cv-03070.

The Private Securities Litigation Reform Act of 1995 permits any investor who purchased Virgin Galactic securities during the Class Period to seek appointment as lead plaintiff in the Virgin Galactic class action lawsuit.  A lead plaintiff is generally the movant with the greatest financial interest in the relief sought by the putative class who is also typical and adequate of the putative class.  A lead plaintiff acts on behalf of all other class members in directing the Virgin Galactic class action lawsuit.  The lead plaintiff can select a law firm of its choice to litigate the Virgin Galactic class action lawsuit.  An investor’s ability to share in any potential future recovery of the Virgin Galactic action lawsuit is not dependent upon serving as lead plaintiff.  If you wish to serve as lead plaintiff of the Virgin Galactic class action lawsuit or have questions concerning your rights regarding the Virgin Galactic class action lawsuit, please provide your information here or contact counsel, J.C. Sanchez of Robbins Geller, at 800/449-4900 or 619/231-1058 or via e-mail at jsanchez@rgrdlaw.com.  Lead plaintiff motions for the Virgin Galactic class action lawsuit must be filed with the court no later than July 27, 2021.

Virgin Galactic is an integrated aerospace company that develops human spaceflight for private individuals and researchers in the U.S.  On October 25, 2019, Virgin Galactic was formed via a business combination between Social Capital Hedosophia Holdings Corp. (“SCH”), a special purpose acquisition company (“SPAC”) and Virgin Galactic’s then-private predecessor (“Legacy Virgin Galactic”), after which SCH changed its name to “Virgin Galactic Holdings, Inc.” and its ticker symbol to “SPCE.”

The Virgin Galactic class action lawsuit alleges that, throughout the Class Period, defendants made false and misleading statements and failed to disclose that: (i) for accounting purposes, SCH’s warrants were required to be treated as liabilities rather than equities; (ii) Virgin Galactic had deficient disclosure controls and procedures and internal control over financial reporting; (iii) consequently, Virgin Galactic improperly accounted for SCH warrants that were outstanding at the time of the business combination; and (iv) as a result, Virgin Galactic’s public statements were materially false and misleading at all relevant times.

On April 30, 3021, Virgin Galactic announced Virgin Galactic was rescheduling its reporting of its financial results for the first quarter 2021 “due to the recent statement issued by the [U.S. Securities and Exchange Commission] on April 12, 2021 relating to the accounting treatment of warrants issued by special purpose acquisition companies (the ‘SEC Statement’).”  Virgin Galactic further advised that “following its review of the SEC Statement and consulting with its advisors, the Company will restate its consolidated financial statements included in its Annual Report on Form 10-K for the fiscal year ended December 31, 2020.  The restatement is due solely to the accounting treatment for the warrants of [SCH] that were outstanding at the time of the Company’s business combination on October 25, 2019.  The Company expects to file the restated financials prior to the new conference call date and estimates that it will recognize incremental non-operating, non-cash expense for each of the fiscal years ended December 31, 2020 and December 31, 2019.”  On this news, Virgin Galactic’s stock price fell more than 9%, damaging investors.

Robbins Geller Rudman & Dowd LLP has launched a dedicated SPAC Task Force to protect investors in blank check companies and seek redress for corporate malfeasance.  Comprised of experienced litigators, investigators, and forensic accountants, the SPAC Task Force is dedicated to rooting out and prosecuting fraud on behalf of injured SPAC investors.  The rise in blank check financing poses unique risks to investors.  Robbins Geller Rudman & Dowd LLP’s SPAC Task Force represents the vanguard of ensuring integrity, honesty, and justice in this rapidly developing investment arena.

With 200 lawyers in 9 offices nationwide, Robbins Geller Rudman & Dowd LLP is the largest U.S. law firm representing investors in securities class actions. Robbins Geller attorneys have obtained many of the largest shareholder recoveries in history, including the largest securities class action recovery ever – $7.2 billion – in In re Enron Corp. Sec. Litig. The 2020 ISS Securities Class Action Services Top 50 Report ranked Robbins Geller first for recovering $1.6 billion for investors last year, more than double the amount recovered by any other securities plaintiffs’ firm.

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