Amazon’s Jeff Bezos Went to Space. Tesla’s Elon Musk Is the Real Winner. – Barron’s

Investors usually want to know what the most important story of the day is, the thing responsible for driving stocks with the potential to become an investing theme that drives returns for months or years.

Jeff Bezos going into space is not that thing.

Sometimes, that one big thing is obvious. On Monday, it was Covid-19. The S&P 500 dropped 1.6%. The Dow Jones Industrial Average dropped more than 2%. And for good reason: The Covid-19 variants are a big deal, even if the markets drop proves to be another blip on the way to higher returns.

Sometimes, though, investors need to know what they shouldnt bother to care about, too. Do you know what todays least significant story is? Amazon.coms Jeff Bezos going into space.

The successful flight was a little anti-climactic for livestream watchers. There were a lot of woohoos and awesomes uttered by the crew, even a few amazings. Still, 82-year old newly minted astronaut Wally Funk said It was only about five minutes.

You wouldnt know it from the coverage, of which Ive been a big part. Im addicted to stories about billionaires spending their money, a little like People magazine is addicted to the Kardashians.

The Kardashian analogy is apt. The billionaire space race is entertainment for investors and little more. Its the modern equivalent of a huge baroque garden or a Victorian menagerie complete with wild animals from India.

(The post-launch press conference included its own menagerie of a sort. The New Shepard crew showed off a collection of items carried on the flight including a piece of a Wright brothers plane, a medallion from an early hot air balloon ride, and a pair of Amelia Earharts flight goggles.)

Rich people spending money has always been a thing, and sometimes it benefits everyone else. People can still visit the gardens at Versailles. They are impressive, even inspiring.

Everyone, including Bezos, knows the personal rocket company business is ripe for criticism. The Amazon founder admits critics of space tourism are largely right. Still, space supporters point to the potential benefits of pushing technological boundaries. The world, after all, might end up with superfast commercial jets or flying cars a generation or more down the road.

But the to be sure of the space tourism saga isnt the potential trickle-down technological benefits from billionaire space dalliances. Long-term technological enhancements are the theoretical reason any mania can be positive for society. The dot.com era, for instance, left us with Amazon (ticker: AMZN) and more widespread internet access.

Not all manias are so giving though. The Financial Crisis was driven by financial technologycollateralized debt obligations and credit default swaps. No one is thanking their lucky stars for those products. There is no guarantee manias result in useful technology. Just look at the most recent financial innovation of zero-commission trades. Its given us meme-stocks.

But if the space race has done anything, its made traveling to the stars cheaper than its ever been. The Space Shuttle cost about $450 million a mission, according to NASAs numbers. The orbiter itselfthe spacecraft on the back of the rocketscost about $1.7 billion. Ultimately, a generation of investing in higher-than-average cost space shuttle technology left America with movies such as Space Camp, U.S. taxpayers with a little more debt, and the lack of astronaut carrying domestic space launch capabilities for a decade.

Thats changed now, but it has little to do with Bezos or Virgin Galactics (SPCE) Richard Branson. Instead, space lovers should thank Tesla (TSLA) and SpaceX CEO Elon Musk. He, like other billionaires, has expressed lofty goals to make humanity a multi-planetary species. Musk however isnt going into space on a tourist flight. Hes the one that brought launch capabilities back to America by pioneering the use of reusable rockets. It is ferrying NASA astronauts to the International Space Station while launching hundreds of small satellites that offer space-based Wi-Fi to clients around the globe. Partly as a result of that decision, SpaceX is worth an estimated $74 billion in private markets.

Compare that to Virgin Galactic, which is worth about $7 billion after creating what Canaccord analyst Ken Herbert described as Disney for the 1% of the 1%.

That sounds negative, but Herbert rates Galactic shares Buy. He believes clients should put the stock in their portfolios. And his $48 target price values Galactic at roughly $11.5 billion. There might just be a long-term business in space tourism.

That illustrates the real to be sure of a billionaire space story. If Bezos, or Branson, wants to build an organization to take them to space, so be it. Those are high-paying jobs for bright engineers. Billionaires can do what they want with their money.

The trade off might be having to listen to them. Morgan Stanley analyst Adam Jonas wrote Wednesday investors should prepare for more influential space tourists to offer their overview effect perspectives.

Not even Amazons stock seemed to care all that much about Bezoss successful flight. Shares closed up about 0.7% on Tuesday, while stock in Virgin Galactic dropped 1.3%. Tesla stock rose 2.2%, rising for the second consecutive day in the run-up to reporting second-quarter numbers on July 26. The S&P 500 gained 1.5%, rebounding from Mondays Covid-19 induced selloff.

Wednesday, a day after the successful launch, Galactic stock is recovering up 4.1% while the S&P has added 0.6%. Amazon stock is down 0.4%.

Write to allen.root@dowjones.com

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Amazon's Jeff Bezos Went to Space. Tesla's Elon Musk Is the Real Winner. - Barron's