What happened

Shares of e-commerce giant Amazon.com (AMZN 2.88%) stock took a hit Monday, falling 2.1% through 3 p.m. EDT.

In the absence of bad news to explain the drop, I am forced to conclude that Amazon stock is dropping today because of...good news.

Glowing red stock chart arrow trending down.

Image source: Getty Images.

So what

Specifically, the news that more than two years after it first revealed plans to build its own constellation of broadband internet satellites, Amazon is finally getting "Project Kuiper" off the ground. 

The news broke this morning: Amazon has hired space launch start-up ABL Systems to launch two Project Kuiper satellites "by Q4 2022" atop ABL's "all-new RS1 rocket." Amazon seems excited by the development. According to a statement on the Amazon News website: 

These satellites—KuiperSat-1 and KuiperSat-2—are an important step in the development process. They allow us to test the communications and networking technology that will be used in our final satellite design, and help us validate launch operations and mission management procedures that will be used when deploying our full constellation.

Over time, Amazon expects this to develop into "a long-term relationship" as ABL helps Amazon get the rest of its planned 3,236 satellites off the ground and into orbit around the Earth.

Now what

Now what could possibly be wrong with all that? Three problems spring to mind:

First and foremost, the fact that Amazon has chosen ABL as its partner emphasizes the fact that more than two decades after its foundation, Amazon founder Jeff Bezos's own space company, Blue Origin, which has no official connection to Amazon.com, still isn't capable of launching a satellite into orbit.

Second, the fact that Amazon is picking a 2022 launch date with ABL suggests Blue Origin still won't be able to reach orbit for more than a year. And the fact that Amazon has chosen to partner with a start-up with no history of successful rocket-launching creates the risk that these satellites won't launch even by 2022 on any rocket at all.

Third and finally -- and related to the first two reasons -- is the fact that Amazon is beginning this space race far behind its biggest rival in space, SpaceX. To date, SpaceX has launched more than 1,700 of its own Starlink satellites into orbit, helping to lift the company to a $100 billion market capitalization. Part of the reason SpaceX is worth so much, of course, is because it can use its own rocket ships to put its own satellites in orbit, dramatically lowering its costs in comparison to companies that cannot use their own rocket ships to put their own satellites into orbit.

Companies like Amazon.com.

So long as SpaceX retains this advantage, I fear Project Kuiper has little chance of success and is doomed to be a money pit for Amazon.com and its shareholders.