Key insights
- The author expresses strong concerns about Rocket Lab's (RKLB) high valuation, questioning the sustainability of its stock price given weak financials and cash burn. They believe the stock is overvalued, potentially driven by speculative forces, and foresee a future correction. The author's sentiment is bearish, suggesting caution for investors.
RKLB is now trading at 150 dollars pre-market. Even 160 dollars for a short time. Who is still buying this stock at these prices? It looks insane. Even after dilutions, the stock keeps moving up significantly.
All while (excuse my French) their financials still suck. When you take into consideration all their long term costs (which the normal P/E ratio doesn't take into consideration) and assume they turn slightly profitable this year, they will trade at a P/E of almost 2000 at these prices. They don't even have revenue of 1 billion and burn cash like it's being thrown through a wood chipper.
I foresee a big documentary in a few years time on how this stock made many people money, but ruined many more people's life. But instead of waiting for that documentary, I already want to know which forces are driving this stock.
Edit: the RKLB "investors" have taken over this post, which I was quite afraid of. They're literally everywhere spreading their own reality. I end the discussion.