new_glenn

• The Bottom Line: New Glenn is a massive, reusable rocket from Jeff Bezos's private company Blue Origin that, while not a stock you can buy, is a powerful market-shaping force that value investors must analyze to understand the future threats and opportunities facing public aerospace, satellite, and telecommunications companies.
• Key Takeaways:
• What it is: A heavy-lift, reusable rocket designed to dramatically lower the cost of launching satellites and other payloads into orbit.
• Why it matters: It acts as a potential economic moat destroyer for incumbent businesses and a massive catalyst for new ones, fundamentally changing the economics of space.
• How to use it: Treat it as a critical factor in your long-term analysis of any company whose business is touched by space, from satellite operators to legacy defense contractors.

Imagine a new transcontinental railroad is being built in the 1860s. You can't invest directly in the railroad company because it's privately funded by a single, incredibly wealthy industrialist. However, ignoring its construction would be a colossal mistake for anyone invested in wagon manufacturers, canal operators, or land speculators. The railroad is set to completely rewrite the rules of transportation and commerce. That, in a nutshell, is how a value investor should view New Glenn. New Glenn is the flagship heavy-lift orbital rocket of Blue Origin, the private space company founded by Amazon founder Jeff Bezos. It’s a giant, two-stage rocket standing nearly 100 meters tall. But its size isn't the most important feature. Its key innovation, shared with its primary competitor SpaceX, is reusability. The massive first-stage booster is designed to fly back to Earth and land on a moving ship, ready to be refueled and flown again. This reusability is the game-changer. Historically, rockets were like throwing away an entire Boeing 747 after a single flight. By reusing the most expensive part of the rocket, Blue Origin aims to slash the cost of accessing space by an order of magnitude. New Glenn is designed to be the “heavy freight” truck to space, creating a reliable and affordable highway to orbit. Because Blue Origin is private, you can't buy its stock. But you can—and must—analyze its impact.

“We are building a road to space. And then amazing things will happen.” - Jeff Bezos

For a value investor, New Glenn is not a “space toy” for a billionaire. It is a fundamental force of creative destruction that must be factored into the analysis of dozens of publicly traded companies. Here’s why it's so critical through a value investing lens:

• The Great Moat-Destroyer and Moat-Creator: A company's economic moat is its durable competitive advantage. For decades, the prohibitively high cost of launching a satellite was a massive moat for incumbent satellite operators like Viasat or legacy aerospace giants like Boeing and Lockheed Martin (who operate the United Launch Alliance). It created a high barrier to entry. New Glenn, by aiming to make launch cheap and frequent, threatens to drain that moat. Suddenly, competitors can launch their own satellites for a fraction of the cost, challenging established players. Conversely, it helps create moats for new business models that are only viable with low launch costs.
• A Litmus Test for Long-Term Viability: The existence of New Glenn forces you to ask a critical question when analyzing a company in a related sector: “Does this business's success depend on space access remaining expensive and difficult?” If the answer is yes, you have identified a significant long-term risk. A true value investor, following in the footsteps of Benjamin Graham, is a business analyst first. Understanding the shifting industrial landscape is paramount.
• A Masterclass in Capital Allocation: Jeff Bezos is funding Blue Origin's decade-plus development by selling billions of dollars of his Amazon stock annually. This is a prime example of patient, long-term capital allocation aimed at building a foundational enterprise for the next century. As an investor, studying how visionary founders deploy capital into high-potential, long-horizon projects provides a valuable framework for judging the CEOs of the public companies you analyze. Are they reinvesting for the long term, or are they focused solely on the next quarter's earnings?

You can't calculate a P/E ratio for New Glenn, but you can apply a rigorous analytical framework to assess its impact on your portfolio. Think of it as a qualitative overlay to your quantitative analysis.

1. Step 1: Identify Exposed Industries. Start by mapping out the public companies and sectors that will be directly or indirectly affected. These include:
   • Satellite Operators: (e.g., Viasat, Iridium, Dish Network)
   • Legacy Aerospace & Defense: (e.g., Boeing, Lockheed Martin, Northrop Grumman)
   • Satellite Imagery & Data Companies: (e.g., Planet Labs, Maxar Technologies)
   • Telecommunications & Media: (Companies relying on satellite bandwidth)
   • Emerging “New Space” Companies: (e.g., Rocket Lab, and other small-satellite launch providers)
2. Step 2: Ask the “New Glenn Question”. For any company on your list, ask this simple but powerful question: “Is this company's business model helped or hurt by a 90% reduction in the cost-to-orbit?”
   • A “hurt” answer flags a business whose moat is likely to shrink.
   • A “helped” answer flags a business with a potential long-term tailwind.
3. Step 3: Re-evaluate the Economic Moat. Based on your answer, dig deeper into the company's competitive advantage. Is its moat based on the old, expensive reality of space? Or is it based on something more durable, like network effects, proprietary technology on the ground, brand loyalty, or regulatory hurdles that cheap launch can't overcome?
4. Step 4: Search for Second-Order Beneficiaries. Second-level thinking asks, “And then what?” If launch becomes cheap, what new businesses become possible? This could lead you to investigate companies that make satellite components, ground station antennas, or software that processes the massive amounts of data beamed down from new satellite constellations. These are often the hidden winners of a technological revolution.

Let's compare two fictional satellite companies to see this framework in action: “LegacyComm Inc.” and “AgileStream Corp.”

(Of using New Glenn as an analytical tool)

• Promotes Long-Term Thinking: It forces you to look beyond the next earnings report and think about the structural shifts that will define an industry for the next decade.
• Focuses on Business Fundamentals: It shifts the focus from market sentiment to the durability of a company's economic moat and its ability to adapt to technological change.
• Early Warning System: It helps you identify existential threats and massive opportunities long before they are reflected in a company's financial statements.

• Execution Risk is High: New Glenn has faced significant delays. Ascribing 100% certainty to its success and timeline is a mistake. An investor must apply a margin of safety and not build an entire investment thesis on the assumption that it will work perfectly on schedule.
• It's Only One Piece of the Puzzle: A company could be poised to benefit from cheap launch but suffer from poor management, a weak balance sheet, or a ludicrous valuation. This framework is a supplement to, not a replacement for, thorough fundamental analysis.
• The Private Company Problem: Because Blue Origin is private, detailed information on New Glenn's progress, costs, and capabilities is not as transparent as it would be for a public company project. Analysis will always involve a degree of informed speculation.

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• disruptive_innovation
• long-term_investing
• capital_allocation
• second-level_thinking
• competitive_advantage
• margin_of_safety