I previously worked at an investment bank.

My job was to value companies for M&A purposes, tax purposes, and even some stranger reasons like divorce.

Yes, sometimes a married couple owned a business together and one spouse had to cut a check to the other in a divorce settlement.

To figure out how big of a check to write, they came to me.

The work consisted of terribly long hours mostly spent creating complicated formulas in Microsoft Excel.

But learning how to value companies has proven extremely useful when investing in the stock market.

Without a doubt the most important lesson that I learned is DO NOT overpay for a business.

You can love a business. You can believe in its future. You can even be right about where the business is going.

But if you overpay, you’ll still lose money.

That’s exactly what I’m seeing with SpaceX.

There’s no question it’s an incredible company.

But at a rumored $1.75 trillion IPO valuation, that price tag isn’t just ambitious… It's absurd.

Breakdown: The Math Behind SpaceX’s Valuation

In my banking days, we spent weeks building 50-tab Excel models to estimate earnings and discount future cash flows.

Of course, SpaceX likely doesn’t have earnings or cash flows so I have to resort to the Price-to-Sales (P/S) multiple.

[Note: I say “likely” because SpaceX’s financials are still private. Official figures will be released in a few months.]

For reference, we hardly ever used Price-to-Sales multiples when valuing a business.

The Price-to-Sales ratio was reserved for high-speculation, money-losing startups where I’d give my opinion of value and then heavily disclose that I used plenty of assumptions that may or may not come true.

SpaceX fits into this category.

To understand why a $1.75 trillion price tag is so jarring, you have to compare it to the market’s other large tech companies.

SpaceX IPO investors will pay well over 100x sales.

Meanwhile, the most “expensive” mega-cap stock is Broadcom at just 21.7x sales.

But this story gets even worse…

PitchBook recently argued that a $1.75 trillion valuation is "not so crazy" if you look far into the future.

Their forecast suggests SpaceX could hit $150 billion in revenue by 2040.

As an analyst, this is where I run for the exit.

If you buy this IPO at $1.75 trillion, you are paying 12 times revenue on numbers that are 15 years away.

15 years!

In the investing world, 15 years is an eternity.

15 years ago NVIDIA was a $9 billion company. Uber was a startup in San Francisco. Netflix was still delivering DVDs by mail.

Buying SpaceX at IPO is essentially betting that Elon Musk will perfectly navigate a decade and a half of launch schedules, regulatory hurdles, and satellite deployments without a single major setback – just to justify today’s price.

Not to mention the competition that’s already heating up from companies like Rocket Lab, AST SpaceMobile, and Amazon.

That’s a lot to get right.

In banking, I learned very quickly the more assumptions you have to stack on top of each other to justify a price, the weaker the investment case becomes.

None of this is a knock on SpaceX.

It’s one of the most impressive companies in the world.

But great companies and great investments are not the same thing.

SpaceX – at this valuation and under these assumptions – is not a great investment.

Stick with The Million Mission as I break down the SpaceX IPO news as it’s released.

For now, know that I’m urging you to stay AWAY from this IPO.