The news of the day is all about Amazon founder Jeff Bezos’ philanthropic efforts, but on the business side of things, an influential financial analyst argues that the world’s richest man is an “emerging force” with the financial muscle to advance the global space industry — and Amazon as well.
In a note to investors, Morgan Stanley analyst Adam Jonas and his colleagues say Bezos’ Blue Origin venture, as well as Amazon, should be included along with Elon Musk’s SpaceX and more than 100 other firms as key participants in a commercial space race.
Jonas writes that investors may want to pay far more attention to Bezos’ space efforts, which the billionaire has said is the “most important work that I’m doing.”
One reason has to do with Bezos’ growing fortune, which is now estimated at roughly $160 billion. Jonas notes that’s “equal to around 16 years’ worth of NASA expenditure on space exploration.” (The calculation is based on the assumption that about half of NASA’s annual $20 billion budget is spent on space exploration and operations, with the rest going to aerospace, education, science and other administrative items.)
The other reason has to do with Bezos’ oft-stated passion for and commitment to space exploration. The 54-year-old has said he’s been a space geek since he watched the Apollo 11 moon landing at the age of 5. In a series of GeekWire interviews, he has advocated returning humans to the moon, “this time to stay,” and he lightheartedly owned up to the claim that he founded Amazon to make enough money for his space ambitions.
Bezos is certainly putting his money where his passion is: He says he’s divesting about $1 billion of Amazon stock annually to support Blue Origin.
Blue Origin is working on its New Shepard suborbital launch system, which could start flying people to space and back early next year; its New Glenn orbital launch system, which could be launching satellites by the early 2020s; its Blue Moon lander, which could be delivering cargo to the lunar surface by the mid-2020s; and heaven knows what else for the years beyond.
Bezos has arranged for privately held Blue Origin’s finances to be separate from publicly traded Amazon’s, but Jonas argues that even Amazon is in line to profit from space-related efforts: Here’s how Jonas put it in the note to investors:
“We estimate that the $350 billion global space industry will grow into a $1.1+ trillion global space economy by 2040.
“Amazon is the global e-commerce leader with operations in developed and developing countries. At a high level, increased global internet connectivity is likely to lead to rising e-commerce adoption, which will move more consumer dollars into Amazon’s ecosystem.
“Our U.S. internet team identified Amazon as one of the Morgan Stanley ‘Space 20’ publicly traded stocks that are best positioned to benefit from TAM [total addressable market] expansion, cost reduction or multiple expansion from advancements in the space economy.”
The reference to increased internet connectivity adds weight to the importance of satellite constellations such as SpaceX’s proposed Starlink system (pioneered at its facilities in Redmond, Wash.) or similar systems that are in the works at OneWeb and Telesat. This week, Space Intel Report quoted unnamed space industry officials as expressing concerns about the financial viability of such efforts.
Meanwhile, Amazon Web Services is signaling through its employment listings that it’s getting more involved in space and satellite systems. Who knows? Perhaps Bezos’ passion project and his day job (or should that be “his Day One job”?) will become more intertwined as the market matures.