Tulip Bulbs In Geostationary Orbit—The Insanity Of Space X’s $1.7 Trillion Valuation

[Stalin]

Boy, do we have inflation! And we’re not referring merely to yesterday’s +4.2% Y/Y gain on the CPI and today’s +6.5% Y/Y rise in the PPI.

The ultimate inflationary eruption, in fact, is coming squarely at us in tomorrow’s absurd $1.7 trillion IPO of Space X. After all, the relentless central bank monetary inflation of the last several decades did not mainly end up on main street, and it most surely did not disappear silently into the equivalent of a financial black hole.

To the contrary, it flooded into Wall Street and the linked and related asset markets all around the planet, sending valuations soaring into the financial stratosphere.

And we do mean biblical flood of fiat credit. When the Greenspan era got rolling in 1990, the combined balance sheets of the Big Six central banks (Fed, ECB, BOJ, PBOC, BOE and Swiss central bank) totaled $2.0 trillion and represented just 14% of the GDP of their constituent economies.

But after the print-a-thons of the dotcom boom, the Great Financial Crisis of 2008-2009 and the pandemic era eruption of central bank bond-buying, the combined footings of the Big Six central banks stood at $32 trillion and 68% of their constituent GDP by 2022.

To put those gargantuan numbers in perspective, just consider where these balance sheets would have stood by 2022 under Professor Milton Friedman’s 3.0% annual growth of the money supply, based on the correct idea of zero inflation and long-run potential GDP grwoth of about 3.0% per year.

The answer would have been the $2.0 trillion starting point of 1990 would have grown to $5.0 trillion by 2022. So the Big Six central banks along probably generated upwards of $27 trillion of excess central bank credit even under Friedman pro-central bank economic model. And needless to say, that massive excess of cheap, high-powered money ended up in the great financial bubbles of the present era.

As it happens, we have no particular beef against Elon Musk, and believe he has been one of the great capitalist entrepreneurs of the present era—-to say noting of his charitable endeavors, such as rescuing X from the Deep Staters and attempting to shed some DOGE-light on the massive waste in the Federal budget.

But where we do take issue is with the cult following that his business ventures have attained in the Fed-fueled, bubble-ridden financial markets. In the case of Tesla, there is nothing special about his vehicles in a congested, over-supplied EV market that has now slowed down to 5-7% annual growth compared to one-time surges of 20% to 35% a few years ago.

As it happens, however, notwithstanding slumping growth and aggressive competition, ranging from the giant auto industries of China and Japan to the formidable luxury European automakers, Tesla is still trading at this very moment at 305X adjusted free cash flow!

That’s right. Its current market cap of $1.26 trillion dwarfs it adjusted free cash flow into a rounding error. And, to be clear, we are not talking about Tesla’s sales multiple or its so-called PE multiple based on Wall Street’s hideously bloated measures of “adjusted” EPS.

Tulip Bulbs In Geostationary Orbit—The Insanity Of Space X’s $1.7 Trillion Valuation

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comrade stalin
moscow

 

[Stalin]

The graph below, obviously, leaves nothing to the imagination. The Tesla cult in the Wall Street casino has driven its market cap (blue line) skyward, from barely $100 billion in 2019 to $1.260 trillion at present—even as its free cash flow has barely inched along the floorboards of the graph.

If there were ever an example of bottled air speculation, surely it is indicated by the graph below. Tesla valuation is just plain insane because its not actually even based on its free cash flow.

Instead, it stems from an out-of-this-world driver-less vehicle narrative that may or may not come to pass. But if it does it will surely see the entire existing auto industry jumping into the frey by making and leasing vast fleets of driver-less vehicles under existing brands or countless new ones to yet be invented.



Moreover, there is a reason we have based the red line on “adjusted” free cash flow, and that’s because even the meager amounts of cash from operations after CapEx that Tesla has reported over the years were materially flattered by goverment mandated EV credits from its competitors.

Alas, those credits didn’t create value—they simply stole it from the competition at government gunpoint.

Accordingly, since it went public in 2010, Tesla has generated a scant $21.2 billion of reported free cash flow. Yet upwards of $10 billion of that didn’t have anything to do with making cars, and everything to do with lobbying governments for the helping hand of EV credits.

But now that every automakers has jumped into the EV game, those credits are going the way of the do-do bird in any event.



ibid

 

[Stalin]

Needless to say, the only way you can possibly explain the impending $1.7 trillion IPO of Space X is that Wall Street is attempting to merge the Tesla cultists with the AI fanatics into a financial mania that has not been witnessed since the Dutch Tulip Bulb Mania of 1635.

That is to say, if you think the above Tesla nosebleed valuation is crazy—trading at 305X its honest (adjusted) free cash flow while burning through capital like a drunk sailor on shore leave— then buckle up. You ain’t seen nothing yet.

Elon Musk’s latest financial Frankenstein, the newly public Space Exploration Technologies Corp. (soon to trade as SPCX), is gunning for a $1.7 trillion market capitalization on the back of an S-1 that reads like a science fiction prospectus crossed with a venture capitalist’s fever dream. Thus—

• No indication of sustainable free cash flow? Check.
• Massive losses masked by narrative? Double check.
• A “hidden AI plan” that supposedly justifies Elon’s sojourns to Mars? That too!

This is not investment analysis. This is financial insanity enabled by the longest period of monetary distortion in modern history. As we indicated above, central banks printed trillions, crushed yields to zero (and below), and created a world where discounted cash flows from 2040 look more real than actual earnings today.

SpaceX — rebranded and stuffed with things formerly known as xAI, X, and orbital fantasies — is the ultimate expression of this delusion. So it behooves us to tear open the S-1 filed May 20, 2026, and see what the numbers actually say—even as the hopium merchants rewrite reality with reckless abandon.

The S-1 Numbers: A Cash Furnace Disguised as a Space Empire

Consolidated revenue actually tell a story of decelerating momentum. SpaceX reported respectable sales jumps from $10.4 billion in 2023, to $14.0 billion in 2024 and $18.674 billion in 2025. Yet Q1 2026 came in at just $4.694 billion, which annualizes to a 2026E run-rate of roughly $18.8 billion — essentially flat with 2025.

Thus, the three-year CAGR from 2023 to this 2026E run-rate is only about 22% per annum. That’s respectable for a private rocket company, but it is not remotely near the triple-digit sales growth rates the valuation implies.

ibid