Elon Musk, founder of SpaceX, left, and Amazon and Blue Origin founder Jeff Bezos.
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An Amazon shareholder lawsuit alleges that the company disregarded SpaceX for lucrative satellite launch contracts due to Jeff Bezos’ personal feud with Elon Musk, who has long mocked Bezos’ space ambitions.
Cleveland Bakers and Teamsters Pension Fund (CB&T) filed a complaint on behalf of Amazon in Delaware Court of Chancery, emphasizing the rivalry between Bezos and Musk, citing Musk’s taunts on social media about Bezos’ space efforts at both Amazon and Blue Origin.
Last year, Amazon made a significant rocket deal by signing launch contracts with United Launch Alliance (ULA), Arianespace, and Bezos’ Blue Origin. During its annual shareholders meeting in May, Amazon disclosed its plan to spend approximately $7.4 billion on launch services through 2028, with a significant portion going to Blue Origin.
The CB&T lawsuit alleges that Bezos and Amazon’s leadership breached their fiduciary responsibilities by excluding SpaceX, the leading rocket provider with competitive pricing and a record-breaking launch rate. Amazon disputes these claims.
CB&T, represented by Grant & Eisenhofer, filed two counts of breach of fiduciary duty against the defendants. The lawsuit does not disclose the size of CB&T’s Amazon stake or its total assets under management.
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The lawsuit alleges that Amazon’s leadership failed to adequately analyze the rocket launch market and approved the contracts without addressing Bezos’ conflict of interest. CB&T claims that SpaceX was not considered as an option, and the audit committee was not updated on the negotiations for nearly 18 months.
CB&T also highlights the contrast between the approval process for Amazon’s rocket contracts and its acquisition of Whole Foods, where the company engaged financial advisors. The lawsuit points out the potential harm caused by the board’s decisions and Bezos’ refusal to seek assistance from his rival, SpaceX.
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