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Watch Out, SpaceX! Blue Origin Threatens Space Stocks as Bezos Renews Focus

It looks like a new day is dawning for the space race as Jeff Bezos steps down from the helm of Amazon (NASDAQ:AMZN) in favor of other projects. One of those projects appears to be Blue Origin, his suborbital space flight company and a challenger to SpaceX. For investors, this is a story to watch. Beyond the Blue Origin vs. SpaceX drama, what does Bezos stepping down mean for space stocks?

A Blue Origin production facility in Cape Canaveral.

Source: Thomas Kelley / Shutterstock.com

One of the top stories in the stock market today is the news that Bezos is stepping down from his role as Amazon CEO in the third quarter. Then, he will become executive chairman and AWS head Andy Jassy will take over. While Bezos wants to step away from the day-to-day operations at Amazon, he also wants to step into a new focus.

Luckily, he has several other companies in his portfolio to help him do just that! Beyond his various philanthropies and the Washington Post, Bezos heads up Blue Origin, a suborbital space flight operation and an aerospace manufacturer. Perhaps most importantly for investors, it is also a rival to SpaceX.

The Blue Origin vs. SpaceX race promises to be a battle between innovative billionaires. It also promises to disrupt the red-hot world of space stocks. As Elon Musk and Bezos face off in their own personal space race, what will it mean for the industry? And where will other players like Virgin Galactic (NYSE:SPCE) fit in?

Blue Origin vs. SpaceX

Billionaire entrepreneurs like Bezos, Musk and Sir Richard Branson are heading up this new space race. No longer a matter solely of government agencies like NASA, private companies drive this race. They want to make space exploration and rocket launch more affordable and more accessible. Not only do they want to revitalize existing space programs, they want to transform the way everyday consumers (or at least wealthy ones) engage with space.

Given that background, Blue Origin and SpaceX share many similarities. Each has an eccentric billionaire founder who has personal dreams about space. Each plays off existing space infrastructure, renting historic launch pads and nabbing government contracts. Lastly, each is a player in this new era of aerospace manufacturing.

However, the story of Blue Origin vs. SpaceX also includes plenty of differences.

Blue Origin is focused on the suborbital space tourism market, and on suborbital spaceflight in general. Its New Shepard vehicle has yet to carry passengers, but testing continues. Additionally, the company is making moves in orbital spaceflight through its New Glenn launch vehicle and different rocket innovations. Where things stand now, it is not exactly clear what comes next for Blue Origin. Bezos has previously said that he wants to build a permanent base on the moon, perhaps giving us a long-term trajectory. The company is working on its Blue Moon moon lander, eyeing a completion date in 2024.

SpaceX on the other hand is eyeing Mars as its final destination. Musk, always a bit out there, dreams of creating a self-sustaining society on Mars. In the meantime, SpaceX is focusing on different elements of the spaceflight process to make that Mars dream one day more accessible. To start, the company has lowered the costs of spaceflight. After setting a variety of milestones, it became the first private business to send astronauts to the International Space Station and into orbit. And while Musk targets a more traditional business, Mars is never out of mind. In fact, SpaceX just completed another test flight of its Mars prototype rocket over the weekend. Unfortunately, the Starship exploded on landing.

What Comes Next for Space Stocks?

There are two parts to the story here. The first is that with Bezos stepping down from Amazon, the Blue Origin vs. SpaceX battle is only going to heat up. Blue Origin will race to set its own milestones and launch its tourism business. SpaceX will keep tracking its out-of-this-planet dreams. On one hand, this means that space stocks could suffer as two big players become even more competitive. On the other hand, it could mean that investors turn to publicly traded companies to cash in on the enthusiasm.

Remember, investors do not have direct access to Blue Origin or SpaceX. While rumors remain that SpaceX will come public via Pershing Square Tontine Holdings (NYSE:PSTH), space stocks bulls may have to look elsewhere.

So where should you look? Virgin Galactic, the suborbital space tourism business from Branson, is one obvious pick. The company has been benefitting from rescheduled test flights and r/WallStreetBets hype. Most importantly, if its upcoming tests go well, it will be nearly ready to launch its commercial business and start profiting from wealthy customers.

SPCE stock is not the only option, however. Maxar Technologies (NYSE:MAXR) is another direct play. Through blank-check companies, we also have Astra Space (NASDAQ:HOL), AST SpaceMobile (NASDAQ:NPA) and Momentus (NASDAQ:SRAC). Plus, rumor has it that Branson will bring Virgin Hyperloop or Virgin Orbit public through another special purpose acquisition company.

The Bottom Line

Wise investors caught on to the space stocks trend several weeks ago when Cathie Wood of Ark Invest left her mark. Announcing a new Space Exploration ETF, Wood showed the world that the space race was about to be seriously profitable. Jeff Bezos stepping down from Amazon in favor of Blue Origin proves just that.

Whether or not you profit is up to you. Do your own research, and keep these hot space stocks on your radar.

On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article. 

Sarah Smith is a Web Content Producer with InvestorPlace.com. 


Article printed from InvestorPlace Media, https://investorplace.com/2021/02/blue-origin-spacex-jeff-bezos-space-stocks-spce-arkx-hol-srac-npa/.

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