
Jeff Bezos Is Selling $1B a Year in Amazon Stock to Finance Race to Space - sndean
https://www.nytimes.com/2017/04/05/science/blue-origin-rocket-jeff-bezos-amazon-stock.html
======
itchyjunk
I think spacex getting some competition is good and healthy for the space
market. Even though I like spacex a lot, monopoly isn't the preferred choice.

I was trying to find difference between blue origin and F9 and found these old
articles. [0] [1]

\-------------

[0][http://www.theverge.com/2015/11/24/9793220/blue-origin-vs-
sp...](http://www.theverge.com/2015/11/24/9793220/blue-origin-vs-spacex-
rocket-landing-jeff-bezos-elon-musk)

[1] [http://www.popularmechanics.com/space/rockets/a18711/blue-
or...](http://www.popularmechanics.com/space/rockets/a18711/blue-origin-vs-
spacex/)

~~~
fsloth
Space X 'getting competition'?

You do realize the 'old' rocket companies haven't gone anywhere. Yes, Space
X:s success is astounding but let's not get myopic about it.

~~~
nickik
They haven't gone anywhere but none of them can compete in price. Even the new
vehicles, ULA Vulcan and Arianspace Arian 6 will be vastly overpriced, even if
they reach the goal price they have set for themselfes.

For SpaceX reuse and the price saving are already a reality, ULA and
Arianspace are only in the concept phase for these things. Their rockets are
only planned for first flight in 2020 and maybe reuse a couple of years after
that.

The only reason Arianspace can compete at all is that they don't amortize the
development of the rocket.

~~~
piquadrat
They may not be able to compete on price, but they sure can when it comes to
reliability and launch cadence (current strike action in French Guiana
notwithstanding). Ariane 5 is currently on a 77 successful missions streak.
SpaceX has a long way to go to reach those numbers.

If you're trying to get a $250 million satellite into space, price savings of
$20-30 million can easily be outweighed by a long history of successful, on-
time launches.

~~~
taway_1212
Is the satellite that expensive? I would have thought that the cost to develop
it (R&D) would be very high, but the cost to produce one actual satellite unit
(given the R&D money are already spent) wouldn't be a quarter billion dollars.

~~~
piquadrat
Numbers aren't always easy to come by, but e.g. Amos 6, a more or less run-of-
the-mill communications satellite that was destroyed when a Falcon 9 exploded
during fueling operations, reportedly cost around $200 million.

[https://arstechnica.com/science/2016/09/spacex-explosion-
amo...](https://arstechnica.com/science/2016/09/spacex-explosion-
amos-6-satellite-owner-demands-50-million-dollars/)

~~~
Ntrails
Surely the two questions are "price to insure against failure" and "business
risk involved if launch delayed by needing to build a new one"?

~~~
brd529
Insurance for a launch is currently very expensive. My friends in the industry
tell me that insuring a launch increases the cost by 50%.

~~~
Retric
The wording on that is misleading, you insure the satellite AND launch and
then measured things in terms of launch cost. Industry has ~95% success rate
so insurance is limited to around 10% of total costs or basically nobody would
use it.

Further, insuring a 5% risk to a 200m satellite and a 100m launch vs a 200m
satellite and a 50m launch at 10% failure rate would not be 2x because the
payout is 50m less. Also, if the numbers get overly lopsided SpaceX would
offer insurance for it's customers at close to the actual risk adjusted costs.

~~~
valuearb
An Atlas V with the strap-on boosters is roughly equivalent to the Falcon 9
FT, it's about $150M (about $110M without the strap-ons). A brand new Falcon 9
non-reusable is around $65M?

You have a $200M satellite. Insurance on a Falcon 9 launch is $20M, your costs
now are $85M. Even forgoing insurance on the Atlas V can't bridge the gap, and
SpaceX's launch cadence is getting so rapid that you should be able to launch
much sooner too.

~~~
greglindahl
Insurance rates aren't 10%, they're closer to 5%: [http://spacenews.com/space-
insurers-warn-that-current-low-ra...](http://spacenews.com/space-insurers-
warn-that-current-low-rates-are-not-sustainable/) \-- and note that 5%
includes coverage of the 1st year of the satellite, and not just the launch.

Also, using a "flight tested" Falcon 9 apparently does not significantly raise
the insurance rate:
[http://www.floridatoday.com/story/tech/science/space/spacex/...](http://www.floridatoday.com/story/tech/science/space/spacex/2017/03/28/ses-
confident-spacex-rocket-can-deliver-second-time/99699862/) "In one measure of
the mission’s perceived risk, Halliwell said that the insurance rates SES is
paying “did not materially change” from a typical launch on a new rocket."

~~~
gozur88
I wouldn't expect it to, and over time the insurance cost for used boosters
may even be less if it turns out there are more failures related to
manufacturing defects than damage from previous flights. Though it's going to
be awhile before we know one way or the other.

------
oblib
I appreciate the tech very much, but the visions of "Millions of people
working in space"? I have no desire to be a part of that but I do wonder what
they'll be working on?

And "Living on Mars". No thanks, I'll pass on that too. I can certainly see
the thrill of the ride described though and who wouldn't want to be weightless
for 4-5 minutes? But the market for that carnival ride is about as big as the
number of cars Ferrari sells each year so I don't get that.

One can call this a "steppingstone" tech for now if they choose but it's more
likely to be a cliff unless there's something of real value here. Even if we
go out on a limb and say all this is really a way for the wealthy to escape
the planet they'll find there's no place close enough to go so even that
doesn't make sense.

No, none of the above makes sense to me yet so there must be something more
fueling this race than what's being said.

And hey, isn't there also a downside to poking holes in the upper atmosphere
and/or ozone depletion? How long do we let someone profit off the effects of
that?

I honestly don't know the answers to those questions but I do wonder about
them.

~~~
Hermel
You clearly are not a visionary pioneer. That's what it is about. To go where
no one else has gone before, just for the sake of it. Remember, there are
plenty of people doing things like climbing Mount Everest for fun while you
and I are watching Netflix.

~~~
oblib
Oh, but I do have vision. I'm looking for more than a few wealthy joyriders
poking holes in the atmosphere here for nothing more than shits and giggles
and questioning how that might affect our planet.

~~~
aoeu345
If you're going to talk up preservation of the atmosphere while downplaying
the enormous technological progress and bold, financially uncertain moves that
SpaceX is making, you need to give your head a shake. The atmosphere has
already been killed. And the methane that's being unlocked because of it's
desecration will kill you, and it will kill me. We killed ourselves with the
same type of ignorance towards new, uncertain technology that you have
displayed in this comment chain. We took existing, working, and bad technology
(ICE vehicles) and paraded it around to the world, and it worked, because we
could show people how to use them to make money. We had an MVP with gasoline
powered vehicles. People ate it up. Yet electric cars, the correct technology
choice, get no mindshare with the serfs because they're heavier, slower, and
can't exactly carry a dump truck full of aggregate rock up inclines for 24
hours a day.

You need to stop with the sour grapes, the tall poppy syndrome, and you need
to start supporting the people who are actually doing shit. And you need to do
it before the window of opportunity to use our technology to save ourselves
closes. Keep in mind that me writing this comment to you is an enormous waste
of my time, and I really thought it through, so please absorb the meaning in
my words and stop having these pissing matches on the internet over things you
completely misunderstand.

~~~
averagewall
If you're saying climate change will kill any significant fraction of people
alive today - enough that you expect it to kill you personally, then I think
you need some evidence for that. It seems like quite an unbelievable claim -
effectively the end of civilization within our lifetime.

~~~
simonh
I don't believe it's going to kill a lot of people. The planet went through
this before during the Paleocene-Eocene Thermal Maximum[0]. Basically a
quantity of carbon roughly equal to our industrial output estimate up to 2100
or 2200 was released into the atmosphere over about 20k years. It stayed there
for several hundred thousand years, raising global temperatures by 8 degrees.
We're talking aligators and crocodiles living in jungles on Antarctica.
Massive die-outs of microbes in the oceans due to acidification and sea levels
rising. 70m of sea level rise is locked up in polar ice and then there's also
thermal expansion.

None of that is going to happen in our lifetime. But the lifetime of our great
grandchildren? There's a good chance. After all, this isn't the first time.
However we will have several centuries to adapt. The real issue is we're
destroying the natural environment faster than it can possibly adapt or
evolve, but we'd be doing that even without climate change.

[0][https://en.wikipedia.org/wiki/Paleocene%E2%80%93Eocene_Therm...](https://en.wikipedia.org/wiki/Paleocene%E2%80%93Eocene_Thermal_Maximum)

------
adventured
$78.4 billion in personal wealth. 94% held in Amazon, which is currently
sporting a $433b market cap, up 50% in the last year and trading at a generous
200 times earnings.

I hope he sells more than he needs, faster than he needs, before this latest
bubble (slight or extreme is open for debate) gives out. I wouldn't have
guessed that Blue Origin could cost him ~$1 billion per year to subsidize. I'm
glad he's doing it, very few people on the planet could afford to; of those
that could, fewer still would care to.

~~~
jaxomlotus
He's a huge fan of Star Trek - he named his family investment office Zefram
LLC after Zefram Cochran, a fictional character who invented the warp drive.
If anyone on the planet wants to see the future of Star Trek become a reality,
it's him.

~~~
jtraffic
The concept of Life Imitating Art isn't exactly about trying to make parts of
Star Trek a reality, but I think it still applies here. Bezos probably would
have been obsessed with space _without_ Star Trek, but it still seems possible
that it influenced him.

I'm going out on a limb, but based on this alone, I rank the Star Trek
franchise as one of the most influential bodies of fiction ever created. I
think of it as a catalyst, rather than a cause, but still.

This article suggests Musk is a big fan of Star Trek as well:
[https://arstechnica.com/science/2016/09/without-star-trek-
th...](https://arstechnica.com/science/2016/09/without-star-trek-there-would-
be-no-spacex-or-blue-origins/)

(Forgive the click-bait title, it doesn't reflect my view.)

------
nyxtom
Blue Origins seems pretty likely to tap into a much lower cost market for
panoramic views of earth at high altitudes, similar to Virgin Galactic (had
they not completely messed things up). Developing something that will get them
into LEO is massively more difficult, with significant funding at $1B a year
however (which is about 5% the total NASA yearly budget), hopefully they can
make up their lag. I would love to see more and more ventures enter this
market. The more the better!

------
OrwellianChild
I'm impressed by the burn-rate of $1B for a company that isn't actively
launching on a regular basis... Does anyone have any idea how much capital
SpaceX sunk before it got its Falcon 1 up and running?

~~~
acover
From PayPal musk got $185 million. $100 million went to SpaceX which paid for
the 4 falcon 1 launches.

Musk was nearly bankrupt due to SpaceX and Tesla but now they've made him a
billionaire.

[1] -
[https://en.wikipedia.org/wiki/Elon_Musk](https://en.wikipedia.org/wiki/Elon_Musk)

~~~
adventured
Founders Fund also put $20m in, in 2008, before the Falcon 1 reached orbit for
the first time.

------
appleflaxen
Space should be a much lower priority than climate change. There's not as much
excitement or fun in it, but it's about a million times more pressing.

~~~
PierreRochard
I could not disagree more. We should adapt to climate change as it happens.

Besides, all of the resources we pour into forcing the climate to not change
(which would be unprecedented!) are all for naught when that asteroid hits.

~~~
rhino369
>are all for naught when that asteroid hits.

Hiding in space from an asteroid strike is a bad plan. Earth during an impact
winter is still much much more habitable than anywhere else in the solar
system.

~~~
sqeaky
I think you are approaching the problem the wrong way. If we are in space we
can prevent the strike entirely.

~~~
rhino369
Good point.

------
chki
I'm not really sure about the amount of money needed to have an actual impact
on a stock like Amazon but maybe somebody more knowledgeable might have an
idea: Does this measurably lower the market valuation of Amazon? If there is
constantly someone selling shares in those volumes there should be some
effect, even if Bezos is obviously not selling $1B in one day but over the
course of the whole year?

~~~
grondilu
> Does this measurably lower the market valuation of Amazon?

Only if this sale generates a significant drop in price, which it probably
doesn't (after all that price has continuously risen in the last few years).
I'm no expert but I believe if you sell in small quantities at a time and at
market price, you won't lower that price.

~~~
temp246810
I think this is what OP is asking - in other words, does Bezos selling 1BN in
stock per year lead to a drop in price.

------
myroon5
When he talks about millions of people working in space, what jobs is he
talking about? Primarily resource mining?

~~~
ansible
Solar power satellites would be a nice-to-have for the ultimate "clean energy"
supply for Earth civilizations. I haven't looked recently to see exactly how
practical they are though.

~~~
dirtyaura
One would assume that harvesting energy is practical (sans the launch cost),
but practical way to transfer the energy back to the earth is the unsolved
problem.

~~~
TeMPOraL
Microwaves. The problem with that though is, from what I hear, such technology
would double as an orbital weapons platform.

I wonder what the math says about big mirrors focusing more sunlight over
empty areas where we could put lots of solar panels.

------
rokhayakebe
I just hope that these planets to get to do not become first come first serve
and these individuals claiming ownership of the vast majority of them.

~~~
nol13
Descendants of the first space farers will probably make up the majority of
the genetic pool that goes on to dominate the galaxy. Ah well at least we got
nature and stuff down here, for now at least. :/

Slightly extrapolating of course.

------
tryitnow
Is this perhaps a signal that it might be a good time for others to start
selling Amazon stock?

I know if I were Bezos I would sell when I thought the stock was overpriced. I
wonder if this is an indication that

Bezos and his team were brilliant for selling a bunch of convertible debt
right before the 2000 crash. And let's not forget Bezos got his start at the
quant fund DE Shaw.

~~~
LeifCarrotson
> I know if I were Bezos I would sell when I thought the stock was overpriced.

You're thinking of the stock as an investment. To Bezos, though, it's an asset
- something that can be sold when he needs liquid funds to finance an
operation like Blue Origin. Perhaps he thinks it will be more profitable, or
more fulfilling, or more fun. What's the point of having investments if you
can't sell them unless they're overpriced?

------
skdotdan
Imagine a reusable rocket, like the SpaceX one, but bigger and being able to
reflight in, say, one week.

If in every flight there were a satellite + space tourists, going to the space
would be much more cheaper, and it's feasible I'm the near term. I see both
SpaceX and Blue Origin offering "cheap" traveling to Space in less than a
decade.

~~~
simonh
The concept video for the MCT launcher showed it landing on the launch pad,
having a new second stage craned on to it, refuelling and launching in the
same day.

~~~
robryan
The stated SpaceX goal is for 24 hour turnaround times. Right now their
turnaround times are around 2 weeks, assuming that they can get a slot for the
range.

This will improve once the pad that was destroyed is rebuilt mid/late this
year.

~~~
lorenzhs
Their current turnaround time is 2 weeks for launching _two different rockets_
, while their goal is to launch _the same booster_ twice within 24 hours.
That's a bit different and even more ambitious. The first "flight-proven"
booster (to use Elon's phrase) took 4 months to refurbish, and the lessons
learned from that are incorporated into the next version of Falcon 9 (Block 5)
in order to simplify and speed up the process (and probably fix some things
they noticed on the landed boosters to improve the number of times they can be
flown).

~~~
simonh
Given the lead time it takes to develop a satellite project and have it ready
to launch, there may even be a danger that within a year or two SpaceX will
have so many boosters on hand and ready to go that there won't be enough
demand around to meet their capacity. They already have a handful of re-
flyable boosters lying around. The limiting factor on SpaceX will be their
ability to churn out second stages. I'm sure that would balance out
eventually, but it could take years for the customer demand to catch up with
them.

~~~
Already__Taken
And now you understand the reason for their satellite internet plan.

------
kakarot
I always figured Amazon and SpaceX would just grow to be sister companies. Let
SpaceX handle hardware and negotiations and let Amazon handle logistics and
sales. Instant 45-minite Anywhere-On-Earth delivery service. I think there
would be enough cash for them to share.

I have no doubt that Amazon wants to dig deep into space mining and being the
backbone of the early solar economy. Who doesn't. It's gonna take a series of
extremely smart investments for whoever does manage to pull that off. The
barrier to a sustainable space economy is quite high.

------
peter303
I wonder why Bezos is spending so much of his own money (OK less than 2% a
year). Musk has perfected the art of spending Other People Money- government
loans, green subsidies, IPO. Plus he has good customer revenue stream in two
of his companies.

~~~
jmeister
Bezos is a lot richer and is on his way to making a ton more.

------
zeristor
To be honest, what else would one do with untold billions?

~~~
hueving
Focus on acute issues in developing nations that will save thousands of lives
like Bill Gates is doing.

~~~
niketdesai
I believe his foundation is allowing other people to contribute in the way he
and Melinda have setup so well. With that said, I like that our largest
influencers are tackling problems at various stages. Finding the ideal mix
will take time (this is all in the last 15 years for the names being dropped).

------
Pica_soO
Rich guy Escapism reaching escape velocity

------
good_vibes
He will be the richest man in the world by 2020 I think.

~~~
adventured
He's $8 billion away from Gates at this point and moving a lot faster. It'll
happen in the next 12 months.

When Amazon hits $500 billion, he'll be the richest person on earth. That's
about 15% up from here, a gain likely to occur before a correction does.

------
chrismealy
Low earth orbit, meh.

