First up, it's very sad to see one you will notice I brought a few shares in Amazon recently too, but sold quickly afterwards.of the all time masters of investing leave the helm at $Berkshire Hathaway(BRK.A)$ . Warren buffet has and will remain one of the largest influencers regarding my investment approach.
he has of course not left completely, but his final shot (selling down 77% of $Amazon.com(AMZN)$ ) is interesting, to say the least.
Clearly the graph I show below illustrates the sell down. you will also see I brought in recently, but quickly sold for a tiny profit. Now I can't tell you why Mr buffet sold. But I can explain why I brought then sold quickly once I understood more.
Looking at my investment notes, I saw a lot of prior success with Amazon. And a massive war chest. This gave me confidence to start a position. But I pulled the trigger because of the future potential not past success.
That future potential is the satalite comms infrastructure... kyper, now renamed Amazon Leo. This looked insanely good going forward until I dug deeper. Note that starlink owns space comms at the moment, but the Leo network could easily take a huge chunk away from starlink, or can it. You see, space x has the keys to space, with it's highly successful falcon 9 rocket, able to launch 10 times a month.
Amazon on the other hand was relying on launch from blue origin, and two other rocket companies. All three absolutely suck, compared to space x. All three have serious execution issues. All have yet to successfully launch a single satellite into space. Let alone 1600 plus, which Amazon must achieve by June/July this year. Too meet the conditions of their license from the FAA. at best they mite get 700 up there on falcon 9s, the competition.
No doubt, Amazon will need to go to the FAA to renegotiate their licensing terms. it mite be approved ??? Amazon can site the need for more competition, but $AST SpaceMobile, Inc.(ASTS)$ will compete With starlink and is executing already. The ceo of Amazon, Jeff bezos could also argue that he's been let down big time by his three rocket companies. But sadly, one called blue origin is owned by... Jeff bezos. Bugger!
But can the Amazon Leo constellation Get their 3,200 odd satellites Into space, yes it's doable if they use space x falcon 9. But I'm picking Elon musk will play hard ball.
Can Amazon get the keys to space then? And not rely on falcon 9. Well here, I defer to sir Peter beck from $Rocket Lab USA, Inc.(RKLB)$ A new rocket program once the first rocket launches... year 1, 1. Year 2, two to three. year 3, 5 Launches maybe. Then cadence builds from there.
I can't remember if Amazon can launch 12 or 24 satellites per rocket, but going with 24, at best, this year, I would suggest that blue origin mite get 24 satellites into space. Next year at best 72. That's a long way from the 3,200 plus satellites they want in space.
So let's cut to the chase, a great company With great leadership. Is a great investment. But if they step outside their wheel house, not so much. Last time I checked Jeff bezos is not a rocket scientist.
The almighty Warren buffet has left the wheel house of Berkshire, in his final salvo, perhaps he's reminding everyone to stick to what you know.
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