SpaceX bonds must be normalized to distressed Junk (if we remove marketing fluff)
u/Donechrome ·
Reddit — r/ValueInvesting
· June 12, 2026 at 16:33
· ⬆ 19 pts
· 💬 22 comments
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AI Summary
Summary
The post argues that SpaceX’s financials (debt-to-EBITDA 4.2, negative interest coverage, -$20B FCF, -$40B retained earnings) would rate as distressed junk (CCC+/Caa1) if evaluated like a normal industrial company.
Author believes the market is ignoring these red flags due to SpaceX’s hype and Elon Musk’s narrative, calling for a credit-rating downgrade.
Quality assessment: Respectably structured DD using publicly available (estimated) metrics, but data is from private company filings/leaks, so it’s speculative rather than fully verifiable.
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SpaceX balance sheet and FCF explain everything I need to understand where it is heading
* Debt-to-EBIDTA 4.2
* negative interest coverage ratio
* FCF to debt -48%. Awful
* Retained earnings -40B!!!
* FCF -20B. with B!
If SpaceX were evaluated as a "regular" asset-heavy business like a traditional airline, automaker, industrial manufacturer, or telecom provider—its credit rating would not just be junk; it would be **deep, highly speculative distressed junk**.
If a credit analyst applied standard quantitative ratios to a regular company showing an accumulated deficit of $41.3 billion, a quarterly net loss of $4.28 billion, and a negative free cash flow of $14 billion, it would score a rating of **CCC+ or CCC** from S&P, or **Caa1** from Moody’s.