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Amazon.com, Inc. (AMZN)’s Jeff Bezos vs Elon Musk in Rocket Wars

Amazon.com, Inc. (NASDAQ:AMZN) Jeff Bezos

Amazon.com Inc.’s CEO Jeff Bezos is in the news today for something new and somewhat expensive. Jeff Bezos has caught the rocket bug (the same one that Tesla’s CEO Elon Musk caught) and he’s prepared to spend $200M to compete with Musk. News has it that Jeff Bezos plans to start building rockets on Florida’s Space Coast as part of efforts to help his space research firm (Blue Origin) reach its goal of launching paying clients into orbit by the end of the decade.

Apple Inc. loses to amazon.com Inc. (NASDAQ:AMZN) earnings

Jeff Bezo’s Blue Origin will take over Cape Canaveral Air Force Station where it will start building its reusable rockets. Bezo’s was quoted saying, “We’re not just launching from here, we’re building here”. He also hinted much of the firm’s plan in the short to medium terms when he said, “We’re making a 21st production facility to manufacture our reusable fleet [of rockets] where we’re ready them for flight again and again.”

What’s with the rockets?

Tesla Motors, Inc   CEO Elon Musk is also involved in the private space research business through his firm called Space X. Space X has been in the news for quite a while but the most recent event was the failure of its last rocket launch. Elon Musk has said that he plans to set up a human colony on Mars – he recently jokingly suggested that nuking mars would warm it up faster.

Jeff Bezos started Blue Origin as a private space research firm more than 10 years ago after he saw the Saturn V rockets launch on Florida’s Space Coast. Blue Origin is planning to test American-made BE-4 rocket engines at the Cape Canaveral, it hopes to qualify the engine for flight in 2017, and the first flight is slated for 2019-2020.

However, it appears that both Elon Musk and Jeff Bezos are taking up hobbies that require blowing things (rockets) up. Well, blowing rockets up doesn’t come cheap and Jeff Bezo’s is expected to spend about $200M while creating some 330 jobs on the venture.

So, how does Bezos’ Rocket Help Amazon

It is somewhat hard to determine how Bezos’ rockets might help Amazon’s business – of course, Amazon and Blue Origins are separate firms. Bezos’ space research project is good for his personal brand as a visionary and this in turn increases confidence in Amazon.

However, the plan could easily backfire if the declines recorded in the shares of Tesla after the failed rocket launch of the Space X mission indicate how investors could be fickle. Bezo’s plan to start building rockets is good for Florida’s local economy, Amazon will get extra buzz with each rocket launch, but Amazon investors can now expect to see increased wild swings as Bezos takes them on an exciting wild ride while shooting off rockets into space.

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Victor Alagbe is a seasoned business and finance writer with a specialty in writing about how to invest for the long-term in healthcare, pharmacology, energy and tech stocks. His long-term focus is on stocks that provide a nice mix of growth and income. For the short term, he passionately writes about trading stock options for the excitement and leverage that stock options offer.

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