Ever wonder how to buy Blue Origin stock? You’re not alone. The only problem is they are not a public company, but there may be a way around that!
Who is Blue Origin?
Blue Origin is a private spaceflight company owned by Amazon.com Inc. (NASDAQ: AMZN) founder and CEO Jeff Bezos. The tech billionaire founded the company in 2000 with the goal of bringing down the cost of space travel to aid the progress of exploring our solar system.
Blue Origin is led by CEO Bob Smith. The company is racing against rivals including SpaceX, the private space company founded by Tesla Inc (NASDAQ: TSLA) and Virgin Galactic (NYSE: SPCE), created by billionaire Richard Branson, to launch tourists into space. Virgin Galactic listed its shares on the New York Stock Exchange in October 2019.
Bezos has previously stated that he plans to invest at least $1 billion in the spaceflight company every year. That money has been coming from his Amazon holdings because the vast majority of his fortune is tied to Amazon.
Bezos sold nearly $2 billion worth of Amazon shares in three transactions between 2017 and 2018 to fund Blue Origin. “Every time you buy shoes, you’re helping fund Blue Origin, so thank you,” he told Amazon customers at an event in February 2019. “I appreciate it very much.”
While Bezos founded Amazon in 1995, much of its insane growth did not start until the 2000s. A key part of Amazon’s strategy beginning in 2009 have been acquisitions. The cloud computing and e-commerce behemoth has acquired over 60 companies since acquiring Zappos for $1.2 billion in 2009.
Amazon has indeed proven that it can move in virtually any direction it wishes, thanks to its aggressive expansion across a wide array of areas of sectors. When small doesn’t work, Bezos and his team at Amazon often tend to go really big as their $13.7 billion acquisition of Whole Foods in 2017 seems to suggest.
Other notable Amazon acquisitions include smart doorbell and security camera manufacturer Ring for about $1 billion in 2018, e-sports streaming site Twitch for $970 million in 2014, and warehouse robotics maker Kiva Systems for $775 million in 2012.
The Bezos Factor
Bezos will soon be stepping down as chief executive of Amazon and transition into the role of executive chairman. In a letter to Amazon employees, he said he intends to put time and focus on other projects he is excited about, and listed Blue Origin among them. Andy Jassy will replace him as CEO.
Now that Bezos has more time in his hands, he is expected to put more time on Blue Origin to kick into high gear and help it achieve reliable reusable flights to the orbit.
However, taking into consideration how far behind Blue Origin is to SpaceX, it will inevitably be a game of catch up. Musk’s SpaceX is now making huge step towards developing a reusable lunar lander that would in future transport the first humans to the lunar surface since the 1970s lunar mission.
According to NBC News, one industry expert believes Bezos needs to take a hands-on approach with the operational role in his space company, if he is going to address several problems like missed deadlines, bureaucratic processes, engineer turnover and high overhead.
The industry veteran says these problems have emerged as Blue Origin seeks to transition from development to production across multiple programs.
But the news outlet, quoting a person familiar with the matter, points out that Bezos does not plan to immerse himself in day-to-day operations, but instead would concentrate on novel endeavors and major initiatives of the company.
Bezos has always shown great interest in space exploration. His aspirations of conquering the high frontier started many years ago when he was a student at Princeton University. He majored in electrical engineering and computer science, and became president of the campus chapter of Students for the Exploration and Development of Space.
Future Outlook of Blue Origin
As previously stated, Bezos plans to use Blue Origin to make commercial space travel accessible and cheaper by reusing rockets. Bezos and his team aim to attach a passenger capsule on a booster rocket and shoot it 62 miles above the surface into suborbital space.
While there, the capsule will detach from the rest of the rocket allowing passengers to experience weightlessness for about four minutes. Blue Origin will allow the passengers to unbuckle their seat belts, float around the cabin, and look out the window at the Earth’s curvature before the capsule begins to fall back into the atmosphere. Parachutes will then deploy to bring the capsule down slowly.
According to sources close to Blue Origin, the whole trip will last only about 11 minutes with a ticket on its New Shepard passenger rocket expected to cost over $200,000, or more than $18,000 per minute. New Shepard is designed to carry up to six passengers and has so far performed well in all tests.
Bezos had previously hoped to make the first space tourism launch in 2017. However, the plan has been pushed back to at least 2020 due to delays.
Blue Origin is also building a new rocket called the New Glenn. The company says the New Glenn will be powerful enough to complete more demanding missions, such as carrying satellites to orbit.
In addition, Blue Origin is busy designing its rocket engines, which are expected to power the New Glenn as well as United Launch Alliance’s Vulcan Centaur. The engine business represents one of the first revenue sources for Blue Origin, and an important reason it has been putting $200 million in its 200,000 sq. ft. engine factory in Huntsville, AL.
Buying Amazon/Blue Origin stock
Unlike Virgin Galactic which is a publicly traded spaceflight company, you might not be able to invest in Blue Origin since it is a private company.
Moreover, there are no indications that Bezos intends to take Blue Origin public soon. And you cannot invest in the company indirectly since it is not directly supported by Amazon.
However, Amazon shares are expected to continue benefitting from strong growth in its cloud-computing, advertising, and retail businesses. Amazon currently accounts for about 44% of all e-commerce spending in the United States.
According to UBS analyst Eric Sheridan, investors have been concerned about a hit to Amazon profits from investments in Amazon Web Services (AWS) and the costs of one-day shipping, but those concerns are largely priced into the stock.
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Bezos has undeniably transformed Amazon into one of the most successful tech companies in the history of IT. Now, the visionary entrepreneur has sights set on space travel and hopes to send tourists into space in the very near future. That would be an excellent strategic move on his part and possibly on Amazon.
Although Blue Origin has struggled, he has injected billions of dollars into the company and dreams of a future in which human beings live in massive habitats in orbit and mine asteroids. Bezos has said in one of his books that the aerospace company “is the most important work I’m doing.”
But can the 57-year-old and his team at Blue Origin generate enough demand to help it make a profit on space tourism? That remains to be seen.
Nevertheless, they are effortlessly working towards making civilian space flight a crucial part of the global space economy, combined with government exploration projects and satellite services that are currently valued at over $300 billion per year.