What happened
Shares of space-tourism company Virgin Galactic (SPCE 19.70%) took flight on Wednesday after news of a test flight started going viral on social media. As of 3:30 p.m. ET, Virgin Galactic stock was up 11%.
So what
Virgin Galactic has two primary vehicles. There's the spaceship that holds the passengers. But the spaceship starts its journey attached to what's called the mother ship. And its mother ship VMS Eve appears to be taking a test flight today.
According to FlightAware, Virgin Galactic's mothership had been airborne for about two hours, as of this writing.
In the conference call to discuss financial results for the third quarter of 2022, Virgin Galactic's management said that it was hoping to complete its enhancements to mother ship VMS Eve during the fourth quarter. After that, it was hoping to do a test flight in January.
Virgin Galactic may have missed that January test-flight target. But the market is nevertheless very encouraged that VMS Eve is taking to the skies again today, and that's why this space stock was up.
Now what
When Virgin Galactic was going public in 2019, it told investors that it was targeting 170 flights in 2022, hopefully generating the company nearly $400 million in revenue for the year. However, through the first three quarters of 2022, it's generated a measly $1.4 million in revenue because it has yet to get its commercial space flights going.
With over $100 million in customer deposits for future flights, demand appears strong for Virgin Galactic. Management last said it was on track to launch commercial flights starting in the second quarter of 2023. And today's test flight is a big step toward that goal and crucial to start generating meaningful revenue.
Virgin Galactic is scheduled to report financial results for the fourth quarter of 2022 on Feb. 28.
