Musk’s SpaceX Partners With U.S. Military

BusinessMusk's SpaceX Partners With U.S. Military

Musk’s SpaceX Partners With U.S. Military

Elon Musk is making a first. His private company, SpaceX, has officially signed an agreement with the U.S. Pentagon to take charge of 40% of launch mission services until 2024.

This not only reinforced the credibility of Musk’s company towards official institutions, but also marked a defeat for Amazon’s Blue Origin, whom Bob Smith said was a “big disappointment”.

This announcement happened right after the successful collaboration between SpaceX and NASA to launch two American astronauts to the International Space Station. 

SpaceX signs a multi-billion dollar contract 

What better news than a second round of good news? 

Right after successfully launching and landing two American astronauts three weeks ago in collaboration with NASA, SpaceX has signed a multi-billion contract with the U.S Military to help launch services until the end of the fiscal year 2024.

“Space Exploration Technologies Corp., the formal name of Mr. Musk’s company is slated to conduct 40% of the missions, achieving a long-cherished goal of breaking into the ranks of the Pentagon’s most trusted corporate partners.”, highlights the Wall Street Journal

While Boeing and Lockheed will keep on carrying the 60%, experts evaluate the transaction to be worth between $4 billion and $6 billion. 

Amazon implements a new strategy

What if this transaction was the kickstarter of a real “star wars”? Since SpaceX and Amazon have been competing for years on this project,  Jeff Bezos, current Amazon’s CEO and founder of Blue Origin, is trying to charm NASA at no price.

Bezos understood that Origin will need to show more credibility and strength before being commissioned by the U.S. government, so he shipped a 40-foot tall lunar lander to NASA for evaluation.

A few days after, NASA replied that its expert were performinga series of tests and simulations”, while Blue Origin’s Vice President of Advanced Development Programs, Brent Sherwood shared that it was a “true honor” , “a step toward making this historic mission real”. 

Blue Origin does not have its own stock since it is owned by Amazon; however, Amazon’s shares soared from $3,080 to $3,312 within a week after the announcement. 

Read on Alvexo: “Amazon Going from Strength to Strength”

Who are the other space pioneers? 

A few other contenders took part in the project with NASA; Northrop Grumman Corp was the fourth contender after SpaceX, Amazon and the venture between Boeing and Lockheed.

Northrop’s shares have risen from $285 on August 9th to $337 last Friday. 

It is considered as being one of the best investments on the market in the space industry. It paid out a 38% of profit last year and is expected to perform at least as good this year. 

The above content is considered to be market commentary information and shall not be perceived as independent investment research or investment advice.