The SpaceX IPO, valuing a motley collection of dubious business at over a trillion dollars, marks the abandonment of the Efficient (financial) Markets Hypothesis, one of the zombie ideas I criticised in the wake of the Global Financial Crisis. Not only do financial markets fail in the task of valuing assets accurately, but the institutional structures that are supposed to make them work have given up trying.
This was prefigured by the rise of Bitcoin and other forms of crypto. Revealingly, no one any longer uses the term “cryptocurrency” – these assets are never used as currency in ordinary transactions, and even their illicit uses seem to have faded. Rather, Bitcoin is valuable solely because it is valued. As I pointed out back in 2018, (free from paywall here) once this logic is accepted, it can be applied to financial assets more generally, and particularly to stock markets.
For quite a while, financial institutions like Goldman Sachs held out against crypto. But the rewards became too great to ignore and the crypto industry too politically powerful. Crypto moved from the netherworld it once inhabited to the respectability of exchange traded funds.
The extension to stock markets has been happening for a while, with meme stocks like GameStop, and then with massive valuations of AI stocks. But meme stocks are a sideshow, and the future of AI is unclear enough that it’s possible to make a case.
It’s only with SpaceX that we can see the complete abandonment of any pretence at rationality. In the case of SpaceX, I was struck by Dave Karpf’s observation that Musk’s wealth in 2020 was “only” $24 billion. Everything of value in his career (Tesla cars, batteries, Starlink) had been achieved by then, and everything he has touched since then has been a disaster (Xitter, Cybertruck, robotaxis, Starship). Yet his wealth has multiplied 50 times over).
In support of the IPO, Goldman Sachs has put its name to the claim that the company will grow 100 times over by 2030. This is patently absurd. Nothing in Musk’s ragbag of assets has this kind of potential.
Starlink, the pre-2020 bit of the business, has been successful enough, but satellite-based Internet is never going to be huge. And there is plenty of downside risk, as Europe and China try to develop alternatives. Given that Starlink’s satellites have a life of only five years, the business could well be in sharp decline by 2030. Starship, by contrast, seems unlikely to succeed in getting humans to the Moon, and won’t make much money even if it does. Talk of Mars, data centres etc is a joke.
The AI part of the business is barely even a joke. Not only is Grok an also-ran in the LLM stakes, but Musks’ promotion of racism, terrorist riots and sex crimes leaves him, and the company open to huge liability, at least in Europe, where Trump can’t protect him.
The comprehensive corruption of the financial system confirms me in the view that the USA is one big grift. Not just the financial system, but politically and militarily as well. But that’s a topic for another day.
John Quiggin 
I agree with some of what you’re saying and the rest is not so much a disagreement, but a clear “I just don’t know”. The examples you raised have that scent of cherry picking due to some… not just notable absences, but unpreceded and unmatched successes eg. Tesla and the Falcon 9 and heavy. I noticed the model Y was the largest seller in Australia in May (1st all-electric car to achieve that).
I’m certainly no Musk fanboy, but I was around lots of traditional space industry insiders who stubbornly and perpetually wrote the reusable concept off for decades, so I guess I’ve grown a touch hesitant to write him off. Then again, I, like everyone else, witnessed a completely unrecognisable attention seeking fruitcake during the twitter takeover and the cosying up to Trump that could only be explained with a [facepalm]^2.
Recently, he has appeared to pull his head in (a bit), and got back (somewhat) to the brilliant engineer/entrepreneur that built SpaceX, Starlink and Tesla. I know people smarter than I who’ve made handy $$$ from SpaceX and Rocketlab, so I just… dunno.
Well, we just have to wait for the:
“Kessler Syndrome (or the Kessler Effect).
Key concepts of the effect:
The European Space Agency (ESA) is tracking millions of debris fragments and developing missions to proactively remove space junk to prevent this scenario from permanently restricting humanity’s access to space. [1]
If you are interested, we can explore:
…
As of May 2026, the CRASH Clock stands at 2.5 days. [1]
Developed by researchers at the Outer Space Institute (OSI), CRASH stands for Collision Realization and Significant Harm. It acts as an environmental indicator that asks a critical question: What is the expected timeframe before a catastrophic collision occurs in Low Earth Orbit (LEO) if all satellite collision-avoidance maneuvers suddenly stopped? [1, 2, 3]
…
Yes, a large solar flare can trigger the exact catastrophic scenario modeled by the CRASH Clock. [1, 2]
In fact, the creators of the CRASH Clock explicitly designed the metric around extreme space weather events—like a solar storm or coronal mass ejection (CME)—as the most realistic trigger for a widespread orbital crisis. [1, 2]
A major solar event disrupts collision-avoidance systems and forces the CRASH Clock to run out through a dangerous, two-pronged assault on Low Earth Orbit (LEO). [1, 2]
1. The Atmospheric “Drag Trap”
When a massive solar flare hits Earth, it blasts the upper atmosphere with high-energy radiation, heating the thermosphere and causing it to puff outward and thicken. [1, 2, 3, 4]
I’d say it’s a matter of “when” not “if”. The orbits will be so junked that space flight will be off the table completely for hundreds or thousands of years. No matter because space flight is pointless and doomed without FTL drives or wormhole use which is all complete fantasy.
Musk’s “genious” was never that of a skilled engineer but an unmatched hype man. Tesla and space-x had great engineers, but he convinced potential customers and investors, as well as the government officials to dump huge sums of public money on those projects, when most people at the time thought good performing electric cars and reusable rockets were impossible.
I’ll give credit where its due because it prevented both companies from dying on the vine. Its what they needed.
Today, the hype machine just seems to cause dangerous over-valuation that is as likely to crash the companies as not.
I’m going to say that in this instance, despite all the opprobium that Elon wilfully generates, the Tesla car is a magnificent vehicle which has proved to be a major disruptor to the stranglehold of the legacy automakers and the internal combustion engine.
Behind Elon there was an army of engineers and designers and they have truly raised the bar on auto making.
EV adoption is critical to moving the economy off fossil fuels.
I have to say that despite Elons well deserved opprobrium, Tesla has produced some magnificent cars.
In the auto business Tesla has proved to be an absolute dragon slayer, sales of EV’s are up as is the trend. Legacy brands are scrambling to retrofit batteries into their vehicles but its not a happy fit, they really are last century all dressed up.
The adoption of EVs is critical to a decarbonised economy and crazy Elon was a warrior and broke through.
So, I recently heard this: “SpaceX’s own prospectus puts roughly $26.5 trillion of its $28.5 trillion valuation in the “AI” category. Space launch doesn’t even move the needle when compared to the ‘calculated’ AI value.”
So, if true, then I’m 200% agreeing with John’s analysis.