SpaceX IPO vs. Amazon: Which Satellite Internet Stock Looks Smarter?

Amazon Leo Offers a Public Market Satellite Alternative

Amazon (AMZN) is also gaining more significance as it launches its satellite broadband initiative. This gives public investors a new opportunity to invest in same theme. Project Kuiper has now been renamed Amazon Leo and Amazon states the network will provide high-speed, low-latency broadband service using over 3,000 satellites. Amazon has also announced it has launched over 300 milestones since 11 missions and will launch more in the future.

The advantage of Amazon is not the same as SpaceX’s. SpaceX has scale in rockets and in Starlink. Amazon has AWS, consumer reach, enterprise relationships, logistics and a solid balance sheet. The company has also said it has agreed to a deal for the acquisition of Globalstar and a partnership with Amazon Leo to support satellite services for iPhone and Apple Watch users. This gives Amazon a direct-to-device angle not just a broadband angle. Amazon could look like secure and more liquid option for those who prefer satellite exposure without chasing the SpaceX IPO premium.

Bottom Line

SpaceX could be among the biggest IPOs of this cycle. But the stock may be entering the public markets with high expectations. The private market price indicates that the demand is very strong. But it also reveals volatility following the quick repricing. So, getting the timing right is important. Those wishing for straight exposure to SpaceX might wait for additional disclosure and transparency of SpaceX’s public valuation. Amazon also has more diverse approach to investing in the satellite broadband space: Amazon Leo, AWS, Globalstar and direct-to-device services. For now, SpaceX is the outlier in terms of growth but Amazon could be the more sensible play on the public market in the meantime until the IPO process is over.