Virgin Galactic Holdings (SPCE -5.24%) is progressing with its plans to build its next-generation spaceship, announcing the site of its final assembly manufacturing facilities. On a day when investors are feeling optimistic, the news was good enough for a 5% jump in the space tourism company's share price.
Virgin Galactic is a space stock that has been grounded for most of the past year. The shares lost half of their value in the first half of 2022 as a series of setbacks caused the company to delay the launch of scheduled service until 2023.
Investors have begun to worry whether Virgin Galactic's core business will ever get airborne.
But the company appears to be proceeding with business as usual. On Thursday night, Virgin Galactic announced it has secured a site for final assembly of its new Delta-class spaceship. The facility is located in Mesa, Arizona, outside Phoenix.
The Delta-class spaceship is designed to fly weekly, and it is key to the company's plan to eventually fly 400 flights per year. Based on current schedules, the spaceship could be available for revenue-generating flights by late 2025.
The announcement comes just a week after Virgin Galactic announced a deal with Boeing subsidiary Aurora Flight Sciences to design and construct a new generation of motherships that will help get the spaceships into orbit.
The progress is to be applauded, but investors should note that these deals do little to address the two primary questions hanging over Virgin Galactic shares. After years of delays, we are still waiting to see if Virgin Galactic has the right stuff to eventually offer regular revenue-generating missions. And once it proves that, it still needs to establish there is enough demand for its services to sustain a high-cost business plan over time.
The jury is still out on Virgin Galactic as an investment, and there isn't much for investors to do right now other than celebrate the progress and hope for the best. It's an exciting company with great potential, but even with these developments, the stock remains highly speculative and should only be held as part of a well-diversified portfolio.