What happened

Shares of space-based cellphone technology company AST SpaceMobile (ASTS -10.79%) had a bit of a delayed blastoff Tuesday morning. After inching just 1.8% higher yesterday on news of a successful technology demonstration, the stock is really taking off in late-morning trading Tuesday -- up 12.6% through 11:50 a.m. ET.

So what

So what lit the candle on AST stock? If you recall, AST SpaceMobile is a fairly recent SPAC space company that boasts it has a technology that can turn every cellphone on Earth into a satellite phone -- able to communicate directly with other just-as-ordinary cellphones via satellites that AST intends to place in orbit.

Personally, I've been skeptical of the company -- and the technology -- in the past, but let's give credit where it's due: Yesterday, AST successfully demonstrated its technology in placing a voice call directly from Midland, Texas to Rakuten in Japan, "over AT&T spectrum using a Samsung Galaxy S22 smartphone," according to a press release, communicating via a BlueWalker 3 (BW3) satellite operated by AST. And to be clear, this call apparently went directly from the Texas phone up to the satellite and then down to Japan, with no cell towers or other terrestrial technology hardware involved.  

In other words, both cellphones involved became de facto satellite phones with the help of AST's satellite.

Now what

It remains to be seen if AST can evolve this technology demonstration into a viable business model. One (albeit gigantic) satellite in orbit does not a communications satellite constellation make, nor does one successful cellphone call mean that AST can reliably connect millions and billions of cellphone calls all around the world daily. (AST says its goal is to "finally bring broadband to ... 5 billion mobile subscribers ... who remain unconnected" around the world).

But it's a start.

Ultimately, AST still needs to raise sufficient funds to put at least 167 more satellites into orbit to complete its constellation. Even for a $1 billion company with nearly $240 million in cash and very modest debt, that may be a too-tall order. After all, at last report AST was burning through cash at the rate of nearly $214 million per year, meaning it only has a little more than a year's worth of funds remaining.  

At the very least, though, yesterday's successful test call should make it easier for AST to ring up some more investor cash to keep its momentum going.