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Virgin Galactic Investor Cuts Stake; Susquehanna Downgrades

Abu Dhabi's sovereign-wealth fund cut its stake in Virgin Galactic and Susquehanna cut its rating on the stock to neutral. The shares nonetheless are higher.
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Virgin Galactic  (SPCE) - Get Virgin Galactic Holdings, Inc. Report shares rose on Tuesday even as an institutional investor pared its holding in the space-tourism company and Susquehanna downgraded the stock.

The Las Cruces, N.M., company was downgraded to neutral from positive. Its price target was set a $32 a share, indicating potential 5.2% downside from the shares' Friday closing price. 

At last check Virgin Galactic shares were 6.4% higher at $32.39.

Abu Dhabi's sovereign-wealth fund, Mubadala Investment, reduced its stake in the company to 11.8 million shares, or 5.04%, from 14.9 million shares, or 7.08%. Virgin Galactic disclosed this sale in a regulatory filing. 

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Mubadala remains Virgin's third largest shareholder, according to S&P Capital, Barron's reported. 

In December, Virgin announced in a regulatory filing that shareholders may sell up to nearly 113 million shares following the end of a lockup period. Virgin said in the filing that it would not receive any proceeds from the share offering. 

Last week, Virgin shares jumped after exchange-traded fund provider ARK Investments filed to launch a space exploration ETF

While ARK didn't identify which companies it would hold in the space-exploration-focused fund, expectations were that Virgin Galactic would be one of the fund’s holdings.

According to the filing, ARK’s actively managed ETF will invest 80% in stocks engaged in the investment theme of space exploration and innovation, defined as “leading, enabling or benefitting from technologically enabled products and/or services that occur beyond the surface of the Earth.”