Stone Fox Capital
Founder, CIO & Portfolio Manager of Stone Fox Capital
Quantinuum's roughly 1,000x price-to-sales multiple prices in a future that is still years away at best, even if the quantum technology is legitimate. x.comÂ
Quantinuum looks expensive against its sales at $48.73. It trades at 101x sales and 38x next year's, while software companies usually get 5x. Fair value is $36.21 to $46.09, about 5x next year's sales give or take 12%, with a pullback level at $40.40. This is a levels-only view based on reported earnings and revenue estimates, with no fundamental work. x.comÂ
Quantinuum's market value relative to sales is not low, but against many poor-quality quantum names it made sense below $60. In this market, P/E and P/S valuations matter only so much: they drive stocks mainly in climates such as rate-hike cycles. Investors fixated on Nvidia being cheap at 21x earnings have missed moves in Marvell and Intel, while software multiples contracted despite claims of cheapness as the future grew less secure. x.comÂ
Quantinuum's IPO adds yet another ridiculously valued company to the quantum sector rather than changing its dynamics. Comparing these companies on technology or business model is like counting angels on a pin. Even Infleqtion trades at 100x revenue and loses a dollar for every dollar of revenue it makes. x.comÂ
The Shortlist targets companies it tags as pump-and-dumps, industry bubbles, constrained-float cases, potential fraud or overleveraged. Its Oct. 23 realistic-value estimates imply large downside, including 79% for ReAlloy, 53% for Critical Metals, 60% for Infleqtion and 62% for Quantinuum. x.comÂ
Quantum computing stocks such as IonQ, Rigetti, Quantum Computing Inc, Arqit, SEALSQ, BTQ and HQ could catch a bid around Quantinuum's IPO. Quantinuum is raising about $1.46 billion at a roughly $14 billion valuation, the first traditional IPO of a full-stack quantum company, anchored by long-only demand. Big IPOs reprice whole sectors as allocators who missed the deal seek liquid exposure, as with Cerebras and SpaceX. The driver is positioning, not fundamentals, so these are very risky trades. … Show more
IonQ's $2 billion offering adds dilution risk without a quantum breakthrough. Chapman and Ballance's predicted 'ChatGPT moment' windows have elapsed; a circulated transcript has Monroe saying commercialization is 'probably not in 5 years.' The offering includes 50 million shares or equivalents and seven-year warrants for another 100 million. An up-to-$1.3 billion all-stock cybersecurity acquisition accompanies de Masi's claim that Q-Day is coming faster than predicted. x.comÂ
IonQ is priced as a story, not a company: with annual revenue under $50 million, its valuation bets on the most optimistic version of quantum computing a decade from now. The market now rewards narrative over earnings and punishes a single missed quarter. That can last a long time when liquidity is ample and risk appetite high, as dot-com stocks in 1999 and SPACs in 2021 showed, so a drop is not imminent. Buyers chasing it are buying how long sentiment lasts, not company value. x.comÂ
D-Wave Quantum is hard to justify as a $7B company trading at 50x 2028 sales in a highly speculative industry, and its CFO is resigning. x.comÂ
Quantum computing is a race whose winners get pricing power over the hardest problems; Google's CEO says quantum is where AI was five years ago. IonQ leads with Q2 revenue of $80.1 million, up 287%. D-Wave alone is in commercial production; Rigetti grew revenue 173%. IBM targets fault tolerance in 2029, Alphabet's Willow began the cycle, Xanadu is photonic, Infleqtion has federal backing, Quantum Computing Inc. is speculative, Arqit sells post-quantum security; an ETF holds the field. x.com … Show more