Billionaire Space Battle

Jeff might have messed up......

This one is too juicy to not write about. And it’s entertaining too.

For anyone who has been living under a rock, SpaceX is far and away the most prominent, cheapest, and most reliable space launch provider. Period.

Amazon is building a 3,000+ satellite internet constellation, not unlike SpaceX’s Starlink, called Kupiter. It’s been known for a while now that they selected ULA’s Vulcan, the Ariene 6, and Blue Origin’s new Glenn to launch all the satellites in around a $10 billion contract.

There’s just a few BIG issues with that.

First, none of those launch vehicles have even had one successful flight yet. While SpaceX is making LEO flights with a landing so routine they have absolutely made it boring. It’ll be at least 2024 before Ariene 6 and Vulcan fly and probably 2025 before New Glenn does.

And therein lies the issue.

Amazon is facing a schedule crunch to launch its Kuiper satellites. Its Federal Communications Commission license requires the company to have half the constellation, or more than 1,600 satellites, in orbit by July 2026, and the full constellation in orbit by July 2029.

The idea that Amazon will be able to launch 1,600 satellites by July 2026 on a bunch of unflown, unproven flight vehicles is completely asinine.

So why did they not select SpaceX? This is where it start to get really juicy.

The suit states “that Amazon’s board was informed SpaceX was not under consideration.”

Why you might ask? Well, it’s no secret Jeff Bezos hates Elon Musk. That’s pretty much the only plausible reason not to consider SpaceX.

Except, well, Jeff doesn’t run Amazon. He’s not CEO and he owns less than 10% of issued shares. And it gets even juicier. See, Jeff owns Blue Origin outright.

While the suit redacts the contract values, it does state that nearly 45% of their overall value goes to Blue Origin, either through the direct contract between Amazon and Blue Origin or ULA’s purchase of BE-4 engines from Blue Origin to satisfy its own Amazon launch contract.

This is no small contract, being somewhere around the size of $10 billion. The published prices alone of the different vehicles mean SpaceX may have been 50% cheaper or more.

So this is about $4.5 billion going to a company that Jeff Bezos owns, with no vehicle that can actually fly the satellites in working condition, by the company Jeff Bezos founded instead of the cheapest, most reliable launch provider in the world. As stated, they were not even considered.

It gets even worse.

By January 2022, Amazon management provided the board’s audit committee with summaries of the contracts it planned to sign with Blue Origin and ULA for Kuiper launches. The suit argues that the committee spent “no more than a few minutes” discussing the contracts, based on the length of the meeting and number of items on the agenda, before approving them and forwarding them to the full board of directors.

The full board met in March 2022 to consider all three launch contracts. The suit claims the board received no expert review of the contracts or other information, including whether the final price was fair to Amazon and whether other launch providers were considered, beyond a 2.5-page summary of the proposed contracts. The board approved the contracts in a meeting lasting 40 minutes.

So basically, Amazon’s Board signed off on this with almost no consideration or asking why SpaceX was not involved.

Here enters Fiduciary Duty.

See, Amazon is a publicly owned company. Its Board of Directors and Officers are required by law to act in the best interests of shareholders.

It’s flagrantly obvious that both the Board and Amazon’s CEO and probably more individuals completely ignored their legal requirements in rewarding billions of dollars to their founder’s company instead of considering a significantly cheaper and already available option with a long history of success over Bezos’s personal animosity. This is outrageous self dealing and rampant breach of fiduciary duty.

Without question, this lawsuit holds merit and will see its day in court if it is not settled in a massive class action lawsuit before then as every Amazon shareholder was damaged and has a right to a claim.

In today’s day and age, it’s beyond petty, in fact downright imbecilic, for both Jeff Bezos and/or Amazon not to consider SpaceX out of personal spite and for the Board and Amazon’s executives to make such a dumb mistake as to not at least make it look like they are passably neutral. They work for the public shareholders, not one guy that owns 10% of the company.

I smell a massive settlement incoming and Jeff having to take a huge dose of humility and give launches to SpaceX.

Now that will be fun to see.