Three months ago, the space industry's most famous company, SpaceX, won a huge victory over rivals such as Lockheed Martin, Northrop Grumman, and their partner Blue Origin -- the space company built by Amazon (AMZN) founder Jeff Bezos. NASA hired Elon Musk's company to be the sole-source provider of lunar landers for NASA's return to the moon.
Space tourism pioneer Virgin Galactic Holdings (SPCE 1.23%) wasn't part of that contest -- but the aftermath may be shaking Virgin Galactic's stock, which was down 3.3% as of 2 p.m. EDT today.
Bezos wasn't one bit pleased about losing the lunar lander contract to SpaceX, and so yesterday, he went back to NASA, hat in hand, and pleaded: If Blue Origin were to "cover" up to $2 billion of the cost of developing, building, and flying its own Blue Moon lunar lander to the moon, might NASA give Blue Origin a contract of its own? (We haven't heard yet what NASA's reply to that offer will be.)
What does any of this have to do with Virgin Galactic? Consider what might happen if NASA takes Bezos up on his offer. Although Blue Origin would collect $2 billion less than it might have wanted, it will still mean billions of dollars of federal government money flowing into the company, helping to pay for Blue Origin's efforts to build bigger, better spacecraft. And those spacecraft, if used for tourism purposes, could carry space tourists higher, farther, and for longer than anything that Virgin Galactic builds (or even plans to build) over the next several years.
Winning a lunar lander contract would therefore give Blue Origin a decided advantage over Virgin Galactic in winning space tourist customers -- not as big an advantage as SpaceX will have with its 100-passenger Starship, but certainly enough to justify a bit of investor pessimism about Virgin Galactic stock today.