With SpaceX IPO, Wall Street has mistaken interplanetary ambition for cash flow. The business plan has been jettisoned for an extraordinary reading list. Financial gravity no longer applies
Valuing equities is usually an exercise in bounded delusion. Analysts forecast unit sales, model software subscriptions, and adjust discount rates until a preferred valuation acquires the appearance of science. But even by those forgiving standards, SpaceX presents a novelty: How exactly is one meant to discount the future cash flows of a million-person colony on Mars?