Amazon files to have shareholder lawsuit dismissed
On December 11, 2023 Amazon requested dismissal of a shareholder lawsuit against it for acting in bad faith by excluding SpaceX in its initial launch contracts with ULA, Arianespace, and Blue Origin to put its Kuiper constellation of satellites into orbit.
The lawsuit claimed that the board performed little diligence on the proposed contracts to launch the 3,236-satellite constellation with the Ariane 6, New Glenn and Vulcan Centaur rockets. The combined contracts were, it stated, the second largest capital expenditure in Amazon’s history at the time, trailing only its $13.7 billion acquisition of grocer Whole Foods.
The lawsuit stated that the board and its audit committee spent “barely an hour” reviewing those contracts, including those that would go to Blue Origin and ULA. Blue Origin is owned by Amazon founder and former chief executive Jeff Bezos, while ULA has a contract with Blue Origin to use BE-4 engines on its Vulcan rocket. The suit estimated that nearly 45% of the value of the contracts goes to Blue Origin either directly or through the BE-4 engine contract with ULA.
Amazon’s call for dismissal disputes these claims, stating that the board spent far more time on the issue, and then documents this. Interestingly, it makes no mention of the recent additional launch contract Amazon signed with SpaceX on December 3, 2023, but it is obvious that this filing was timed to occur afterward in order to strengthen Amazon’s case.
Amazon’s response (available at the link above) is heavily redacted, so some of the company’s claims are difficult to assess. For example, if the board did consider the issue of launch contractors properly, the subject of using SpaceX should have come up and been discussed at length. The redactions make it impossible to determine if this was so. If anything, what can be read suggests SpaceX was dismissed as an option far too quickly.
On Christmas Eve 1968 three Americans became the first humans to visit another world. What they did to celebrate was unexpected and profound, and will be remembered throughout all human history. Genesis: the Story of Apollo 8, Robert Zimmerman's classic history of humanity's first journey to another world, tells that story, and it is now available as both an ebook and an audiobook, both with a foreword by Valerie Anders and a new introduction by Robert Zimmerman.
The ebook is available everywhere for $5.99 (before discount) at amazon, or direct from my ebook publisher, ebookit. If you buy it from ebookit you don't support the big tech companies and the author gets a bigger cut much sooner.
The audiobook is also available at all these vendors, and is also free with a 30-day trial membership to Audible.
"Not simply about one mission, [Genesis] is also the history of America's quest for the moon... Zimmerman has done a masterful job of tying disparate events together into a solid account of one of America's greatest human triumphs."--San Antonio Express-News
On December 11, 2023 Amazon requested dismissal of a shareholder lawsuit against it for acting in bad faith by excluding SpaceX in its initial launch contracts with ULA, Arianespace, and Blue Origin to put its Kuiper constellation of satellites into orbit.
The lawsuit claimed that the board performed little diligence on the proposed contracts to launch the 3,236-satellite constellation with the Ariane 6, New Glenn and Vulcan Centaur rockets. The combined contracts were, it stated, the second largest capital expenditure in Amazon’s history at the time, trailing only its $13.7 billion acquisition of grocer Whole Foods.
The lawsuit stated that the board and its audit committee spent “barely an hour” reviewing those contracts, including those that would go to Blue Origin and ULA. Blue Origin is owned by Amazon founder and former chief executive Jeff Bezos, while ULA has a contract with Blue Origin to use BE-4 engines on its Vulcan rocket. The suit estimated that nearly 45% of the value of the contracts goes to Blue Origin either directly or through the BE-4 engine contract with ULA.
Amazon’s call for dismissal disputes these claims, stating that the board spent far more time on the issue, and then documents this. Interestingly, it makes no mention of the recent additional launch contract Amazon signed with SpaceX on December 3, 2023, but it is obvious that this filing was timed to occur afterward in order to strengthen Amazon’s case.
Amazon’s response (available at the link above) is heavily redacted, so some of the company’s claims are difficult to assess. For example, if the board did consider the issue of launch contractors properly, the subject of using SpaceX should have come up and been discussed at length. The redactions make it impossible to determine if this was so. If anything, what can be read suggests SpaceX was dismissed as an option far too quickly.
On Christmas Eve 1968 three Americans became the first humans to visit another world. What they did to celebrate was unexpected and profound, and will be remembered throughout all human history. Genesis: the Story of Apollo 8, Robert Zimmerman's classic history of humanity's first journey to another world, tells that story, and it is now available as both an ebook and an audiobook, both with a foreword by Valerie Anders and a new introduction by Robert Zimmerman.
The ebook is available everywhere for $5.99 (before discount) at amazon, or direct from my ebook publisher, ebookit. If you buy it from ebookit you don't support the big tech companies and the author gets a bigger cut much sooner.
The audiobook is also available at all these vendors, and is also free with a 30-day trial membership to Audible.
"Not simply about one mission, [Genesis] is also the history of America's quest for the moon... Zimmerman has done a masterful job of tying disparate events together into a solid account of one of America's greatest human triumphs."--San Antonio Express-News
The lawsuit is because of something they did a while ago.
Getting a few Space-X contracts does not correct the past situation which cost them millions in lost revenue and a possible deadline. All because those at Amazon can not get over their Musk hate and think of business first.
It also looks like illegal fund transfers from Amazon to other Amazon founders companies with no return.
The government might look the other way on this if they convert some or all of those transfers to actual loans from one company to another.
If AMZ had engaged with SpaceX from the start then the Kuiper system could now be competing directly with Starlink vs remaining just a promise presuming they could successfully build the satellites and ground infrastructure,(something they much more clearly have the skills to do).
IMHO the shaeholders still have a very strong case. If not against the AMZ board, then almost certainly against Blue Origins and/or Bezos himself because whistleblower disclosures have revealed that Blue Origins ignored contractual obligations and withheld schedule concerns for the BE4 from ULA. If they did indeed do that then it seems quite plausible they weren’t adequately forthcoming with AMZ either.
The really intriguing question here I think is what did Bezos know, and when did he know it? Because he is a principle with fiduciary responsibilities on both sides with an obvious conflict of interest. It’s probably a good thing (for him) that he can afford the best (and therefore least principled) lawyers..