Good morning. Andrew here. Today, I’ve got a scoop on Blue Origin closing in on a big fund-raising round, which is expected to value Jeff Bezos’ spaceflight company at about $130 billion. It would be the first time that outside investors buy a piece of Blue Origin in its 25-year history. We have more details below. (Was this newsletter forwarded to you? Sign up here.)
Investors bet on Bezos’ rocket giantBlue Origin, the rocket company that is becoming increasingly key to NASA’s lunar plans, already has a deep-pocketed backer: its founder, Jeff Bezos. But the company is now raising outside capital for the first time — $10 billion at a $130 billion valuation excluding the new funds — DealBook has learned. It’s a sign of the accelerating space race and investors’ appetite to fund Blue Origin’s ambitions as it seeks to compete with SpaceX, which sits on billions that it raised in its I.P.O. last month. The round: Coatue Management, a big asset manager, is expected to lead with a $4 billion commitment, DealBook understands. (Bezos’ family office is a major investor in Coatue’s Innovative Strategies Fund, which is focused on emerging-technology start-ups.) Bezos himself is set to contribute an additional $2 billion to the Blue Origin round. The other $4 billion is expected to come from large institutional investors. Bezos had signaled Blue Origin’s fund-raising ambitions recently. “We finally have enough visibility into our future and our financial success,” he told me in a CNBC interview in May, adding: “It’s a good time actually to start thinking about the future and bring on some other outside investors.” The external fund-raising would give Blue Origin a set valuation, which would be helpful for future investors and any other financing the company may pursue. (Bezos has said he believes Blue Origin may one day be worth more than Amazon.) And it may relieve Bezos of having to fund Blue Origin himself by selling his holdings in Amazon shares. In May, analysts had forecast that Blue Origin could spend nearly $5 billion this year alone, according to The Financial Times, having spent roughly $28 billion over its existence. It follows in the footsteps of SpaceX’s mega-I.P.O., which raised more than $85 billion and valued Elon Musk’s rocket and artificial intelligence colossus at $1.77 trillion. (SpaceX is now valued at nearly $2 trillion, though its shares have fallen since going public.) Investors appear willing to look past Blue Origin’s recent setback, when in May one of the company’s giant New Glenn rockets exploded during a test, destroying the vehicle and badly damaging its launchpad. Yet the company’s prospective backers are more focused on Blue Origin’s future projects, DealBook understands. They include new launches and orbital infrastructure: Demand is surging for TeraWave, a high-capacity satellite communications network unveiled in January that’s meant to connect up to 100,000 high-priority customers like data centers. (SpaceX’s Starlink is its most profitable business.)
SpaceX falters in its Nasdaq-100 debut. Shares in Elon Musk’s rockets and artificial intelligence company fell 6.8 percent yesterday, even after it officially joined the index of tech heavyweights, a move that prompted a wave of buying by index funds. Wall Street remains bullish, but bubble jitters are weighing on the A.I. trade. The former Pfizer headquarters in Midtown Manhattan looks shaky. New York City’s buildings commissioner, Ahmed Tigani, said the building was stable for now, but warned of tense days ahead. Nearby buildings were evacuated yesterday after reports that internal support columns had begun buckling and several upper floors were sagging. The office tower is being converted into a housing complex with more than 1,600 apartments. Apple says it will spend more than $30 billion on Broadcom chips. The investment is the largest Apple has announced as part of a pledge it made to the Trump administration to invest and spend $600 billion in the U.S. over four years, helping it to secure an exemption from some tariffs. The deal will allow Broadcom to expand a chip-making factory in Colorado, Apple said.
Iran tensions roil global marketsOil prices have spiked after the U.S. and Iran traded fire on targets around the Persian Gulf, and after President Trump said this morning at the NATO summit that he thinks the cease-fire is “over.” Trump also suggested that peace talks are not dead, but tensions are running high: Trump called his counterparts in Tehran “sick people,” and Washington yesterday revoked a waiver that allowed Iran to sell its oil on the global market for 60 days, a key plank of a framework deal both sides signed last month. The market reaction to Trump’s comments was swift:
The turmoil is reigniting inflation concerns. The yield on the 10-year Treasury, a rate that underpins many mortgages and loans, has climbed to 4.58 percent, a multiweek high. Households were already feeling gloomy, according to the New York Fed. Its latest consumer sentiment report published yesterday showed that inflation expectations have risen to the highest level since September 2023, a period when the Fed was raising interest rates to combat inflation. That could put the Fed and other central bankers in a bind. The futures market this morning was pricing in at least one rate hike this year, as soon as September. Would the Fed raise borrowing costs ahead of the midterm elections? Taming inflation this summer could be key to staving off such a prospect. The White House appears to see the risks. Tate Bennett, a top Agriculture Department official, reportedly spoke with grocery store chains, including Walmart, Kroger and Albertsons, about lowering beef prices ahead of the Fourth of July holiday, The Wall Street Journal reports. The A.I. flyaround
QUOTE OF THE DAY “Mark (the wolf) is on this.”Ben Horowitz, the venture capital billionaire, to the C.E.O. of the start-up Deel, amid a corporate spying scandal. Horowitz was referring to Mark Dyne, a jack-of-all-trades — investor, negotiator, legal strategist and more — whom Silicon Valley moguls like Horowitz, Egon Durban of Silver Lake and more rely on to resolve tricky situations, according to The Information. Horowitz’s nickname for Dyne alludes to Harvey Keitel’s shadowy cleanup character in “Pulp Fiction.” Dyne referred to himself in another situation as “the fixer,” The Information adds. Private equity’s backlog growsThe gloomy state of private equity can be summed up by a number: 13,500. That’s how many unsold U.S. companies are sitting in private-equity portfolios as of June 30, according to The Wall Street Journal, citing PitchBook data. The number of total portfolio companies has grown roughly threefold since 2006, when private equity firms owned 4,335 companies. At the current pace, the industry is expected to take nine years to clear the backlog, according to a PricewaterhouseCoopers analysis. Now private equity is coming under another threat, led by artificial intelligence. From The Journal: After bingeing on software firms in 2020 and 2021, many private-equity firms are now stuck holding companies with worsening outlooks and rising debt loads. While only about 1,200 of the 13,500 companies in private-equity portfolios are in the software sector, according to PitchBook, they tied up an outsize portion of firms’ capital after many were purchased at lofty valuations. Debts were already beginning to pile up at the software companies before the so-called SaaS-Pocalypse, when concerns over the risk AI poses to the software industry slashed the valuations of comparable publicly traded software companies earlier this year. It’s not all bad news. The industry took 16 companies public in the first half of the year, the most since 2021. We hope you’ve enjoyed this newsletter, which is made possible through subscriber support. Subscribe to The New York Times.
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