🎲 The 70x Sales Club
The Market’s Worst Bets Rarely Look Dangerous At The Top
The market rarely labels bubbles correctly while they are happening.
At the peak:
they look visionary,
disruptive,
inevitable,
and “too important to miss.”
The problem is that investors often stop valuing businesses and begin valuing narratives.
That distinction matters enormously.
Today, one of the clearest danger zones in the market is the growing class of companies trading at:
70x–115x+ sales.
These are not software monopolies producing extraordinary free cash flow.
Many are:
deeply unprofitable,
massively dilutive,
capital intensive,
and dependent upon continued speculative liquidity.
Yet the market is pricing many of them as if future dominance is already guaranteed.
That is rarely how investing works.
The Mathematics Become Brutal
A company trading at 70x–115x sales does not merely need to succeed.
It must:
hyper-scale,
sustain extraordinary growth for years,
avoid dilution,
maintain financing access,
expand margins dramatically,
and survive inevitable market cycles.
Very few businesses in financial history have achieved that outcome.
At these valuation levels:
even good execution may not be enough.
That is where speculation quietly replaces investing.
The Quantum Mania
The quantum complex may ultimately produce important technology.
That does not mean today’s stocks represent rational investments.
Rigetti (RGTI)
Enterprise Value: ~$7.9B
Cash From Operations: -$61M
One-Month Move: +51%
D-Wave (QBTS)
Enterprise Value: ~$9.7B
Cash From Operations: -$98M
One-Month Move: +51%
IonQ (IONQ)
Enterprise Value: ~$21.8B
TEV / Revenue: 116x
Cash From Operations: -$401M
Stock-Based Compensation: ~$407M
This is the key issue:
the valuations already imply enormous future success.
Investors are effectively underwriting:
commercialization,
adoption,
scale,
margins,
and financing availability
years before the economics have matured.
Meanwhile:
operating cash flow remains deeply negative,
dilution risk remains high,
and investor enthusiasm increasingly drives valuation more than present economics.
That creates an extremely fragile setup.
The higher the multiple, the smaller the margin for error.
Rocket Lab (RKLB): A Great Company Can Still Be A Bad Stock
One of the market’s most dangerous assumptions is:
It does not.
Rocket Lab may ultimately become an important aerospace platform.
But valuation still matters.
Rocket Lab (RKLB)
Enterprise Value: ~$81.6B
TEV / Revenue: 114x
Cash From Operations: -$162M
One-Month Move: +80%
At 114x sales, investors are already pricing:
enormous future scale,
strong future margins,
limited dilution,
and near-flawless execution.
That is a heroic assumption set.
Markets tend to extrapolate favorable conditions indefinitely near speculative peaks.
That is when risk becomes most asymmetric.
Satellogic (SATL) & AXTI: The Second Layer Of Speculation
Speculative cycles eventually broaden beyond the perceived category leaders.
That is where valuation discipline often disappears entirely.
Satellogic (SATL)
TEV / Revenue: 78x
Cash From Operations: -$22M
One-Month Move: +74%
AXTI (AXTI)
TEV / Revenue: 94x
One-Month Move: +74%
These types of setups increasingly resemble momentum vehicles disconnected from near-term economic reality.
When liquidity is abundant:
valuation temporarily stops mattering.
Eventually:
it matters again.
The Option Speculation Layer
One of the clearest late-cycle signals is when speculative call buying accelerates on already overextended narratives.
Examples:
RGTI January $85 calls
QBTS January $65 calls
These trades are no longer simply betting on business improvement.
They require:
continued speculative inflows,
continued narrative momentum,
no financing stress,
no multiple compression,
and near-perfect market conditions.
The farther strikes move from present economics, the more the trade depends upon liquidity psychology rather than valuation.
That is where bubbles become most dangerous.