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Abandoned Navy Base Costs Taxpayers $340,000 A Year For Internet Nobody Uses

Zero Rss
2 weeks 6 days ago
Abandoned Navy Base Costs Taxpayers $340,000 A Year For Internet Nobody Uses

Authored by Matt White via TaskandPurpose.com,

The mostly abandoned neighborhoods on Adak Island, Alaska, were once home to 5,000 Navy sailors and their families. But after 40 years as a supply depot, Naval Air Facility Adak closed in 1997, leaving scores of homes and buildings behind. Today, a small community of government workers and Alaska Native families have turned the streets and buildings of the former base into the town of Adak.

The island, far out on the Aleutian Island chain, is so isolated and decayed that Marines occasionally return to simulate hard-to-resupply expeditionary operations or urban chemical warfare among its abandoned buildings. The civilian population, now well below 100, can only reach the island on occasional civilian flights that land on the Navy’s forgotten runway.

But while nearly all of the 300-odd former Navy buildings in Adak are empty and many are collapsing, the U.S. government pays an Anchorage firm $340,000 per year to maintain internet access to them.

An investigation by the Anchorage Daily News and ProPublica published Monday found that an internet provider collects $340,000 every year to keep fairly slow “broadband” internet service active for the town now on the former Navy base.

“After the Navy shipped out, hurricane-force Aleutian winds pried homes apart,” wrote Kyle Hopkins for the Anchorage Daily News. “The worst of it is in a beachfront neighborhood called ‘Officer’s Country’ on old city maps. Bathroom mirrors and toilets and kitchen tables stand exposed to the rain in homes cleaved in half like dollhouses.”

While “raiding” abandoned buildings on the former Navy base in Adak, Alaska, Marines treat a simulated casualty during Arctic Expeditionary Capabilities Exercise in 2019. Marine Corps photo by Lance Cpl. Tia D. Carr.

But even Navy-built buildings now open to the elements with missing walls and roofs, reporters found, were listed on the internet provider’s roster.

The joint investigation was published as part of an ongoing series by Hopkins on internet access in remote Alaska. Adak was Hopkins’ first review of a community built around an abandoned military base.

Hopkins and a photographer flew to Adak, where many buildings on the former Navy base are uninhabitable, with collapsing walls and roofs, from years without repairs in the bitter weather of the Aleutian Islands. Hopkins visited every address on the old Navy base listed as receiving taxpayer-funded internet service.

But Hopkins reported that he found that nearly all residents use Starlink satellite internet. Blanketing the base, he reported not one customer for the tax-funded broadband.

The federal program, Hopkins reported, is paid for by the Universal Service Fund, a multi-billion-dollar effort administered by the Federal Communications Commission and funded as a small fee on nearly all consumer phone bills. The fund is intended to deliver internet to hard-to-reach rural customers.

Though the buildings on Adak were built by the Navy, the service has no current connection to the town or the pricey internet service.

Closed bases meet varying fates

Adak is one of scores of closed military installations that dot the country. Many have found new lives, like Naval Training Center Baldwin Park, Florida, and Lowry Air Force Base in Denver, Colorado, which are today mixed-use developments with thousands of homes, shopping and businesses. When Hurricane Andrew destroyed Homestead Air Force Base in 1992, a section was repurposed as a major racetrack (other parts were recommissioned as a reserve base in 2003).

Abandoned missile silos in the Midwest have been rebuilt as homes and museums — though some remain dangerously abandoned.

Much of the town of Adak is based on jobs created by federal clean-up of the old base, along with other federal agencies that now oversee federal land on the otherwise uninhabited island.

But the town may have a military future. Alaska Sen. Dan Sullivan has led a campaign to move Navy assets to Alaska, which could include reoccupying Adak. Last summer, Navy Adm. Samuel Paparo called for a revival of the base. Forces there, he said, would provide U.S. forces a first line of defense against Russian aggression to “gain time and distance on any force capability that’s looking to penetrate,” Paparo said at a Senate Armed Services Committee hearing.

Though Adak would be a remote assignment, those sent to the cold, windy island would at least know they’d have internet access.

Tyler Durden Wed, 07/22/2026 - 13:05
Tyler Durden

Can SpaceX Fire On All Cylinders?

Zero Rss
2 weeks 6 days ago
Can SpaceX Fire On All Cylinders?

Authored by Michael Lebowitz via RealInvestmentAdvice.com,

SpaceX’s June IPO raised $75 billion, resulting in an initial valuation of $1.77 trillion, making it the largest IPO in history. SpaceX, encompassing its launch business, Starlink, and the recently merged xAI, peaked at a $2.5 trillion market cap in its first week of trading, briefly tying it with Amazon as the fifth-largest publicly traded company. After only a month, the enthusiasm is rapidly fading.

Perhaps most amazing of all, the fanfare is occurring despite SpaceX producing a net loss of nearly $5 billion in 2025. Based on its $1.84 trillion market cap, investors are clearly not worried about the present. They are excitedly pricing in astronomical growth for SpaceX.

To evaluate SpaceX from a fundamental perspective, investors need to quantify the implied growth in its valuation and compare it with their own and market forecasts. In this article, we attempt to help them by providing context for their growth expectations, using Amazon’s history as a proxy.

Amazon, like SpaceX, was priced at expensive valuations and ultimately delivered on those expectations. Initial Amazon investors who held through the dot-com crash and years of zero earnings have been rewarded roughly 3,300-fold, amounting to about 32% annualized for nearly three decades.

So, the question we pose: what does the Amazon playbook require of SpaceX?

Amazon

Amazon went public in May 1997 at $18 per share, valuing the online bookseller at $438 million. Revenue that year was $148 million. The market was pricing its shares at a price-to-sales (P/S) multiple of roughly 3x. At the time, the ratio was generous for a money-losing start-up, but defensible given that Amazon was doubling revenue every year. Importantly, those who envisioned that Amazon was much more than an online bookstore and appreciated its growth potential must have thought its price-to-sales ratio was dirt cheap.

What followed was one of the greatest periods of sustained revenue expansion in corporate history. Amazon crossed $19 billion in annual revenue in 2008, only eleven years after going public with $148 million in revenue. In 2025, Amazon generated $716 billion in revenue, putting it on par with Walmart as the highest-revenue company in the US. From its IPO to today, revenue has grown nearly 5,000-fold.

That trajectory is nearly unprecedented. Can SpaceX also fire on all cylinders?

SpaceX Today vs. Amazon Then

As the graph above shows, Amazon generated approximately $19.2 billion in revenue in 2008, nearly identical to SpaceX’s $18.7 billion in 2025. In 2008, Amazon’s market cap was slightly under $40 billion, implying a P/S multiple slightly above 2x. SpaceX, with a $1.84 trillion market cap and $18.7 billion in sales, trades at a P/S nearing 100x. The market is pricing SpaceX at approximately 50 times the multiple it gave Amazon at the same revenue level.

While the ratio difference sounds extreme, there are reasons to argue SpaceX deserves a premium:

  • Its rapidly growing Starlink business generates $4.4 billion in operating income, with revenue compounding at a 50% growth rate. However, as we share in the first graphic below, its revenue growth is slowing, and average revenue per customer is declining.

  • The reusable launch business accounts for over 50% of orbital rocket launches, as we share in the second graphic. That said, competition is increasing rapidly, especially from the well-funded Blue Origin, Jeff Bezos’ rocket venture.

  • There is promise in its AI infrastructure business through the xAI merger, but Anthropic, OpenAI, Gemini, and new open-source models like Kimi-K3 appear to hold a meaningful advantage.

The way to rationalize a near triple-digit P/S multiple is through extraordinary, historically unprecedented growth. So, let’s quantify “extraordinary.”

SpaceX’s Implied Growth Rate

Let’s work backward from SpaceX’s $1.84 trillion market cap to gauge the growth needed to satisfy the market’s implied forecast. To do so, we assume that investors demand a 20% annual return. While lofty, it is roughly a third below the 32% Amazon has delivered since its IPO.

If SpaceX shares compound at 20% per year for the next ten years, its market cap will reach $11.4 trillion by mid-2036, implying a share price near $860, assuming no new equity issuance.

With that proxy $11.4 trillion market cap in hand, the only remaining variable is the P/S multiple investors will pay for a mature SpaceX. That multiple determines the revenue it must produce. Consider two scenarios:

  • Scenario one: SpaceX matures like Amazon. Amazon today, after 29 years of dominance across e-commerce and cloud computing, trades at roughly 3.7 times trailing sales. If SpaceX has the same multiple in 2036, it will generate about $3.1 trillion in annual revenue. For context, that approximates the entire GDP of France and roughly a tenth of US GDP. The implied revenue growth rate that clears this hurdle is 67% per year, compounded over ten consecutive years.

  • Scenario two: SpaceX retains a higher premium multiple. A more generous P/S assumption eases the required revenue growth, but the implications are still daunting. At a P/S ratio of 20x in ten years, the required 2036 revenue falls to about $570 billion, roughly three-quarters of what Amazon generates today, and a level Amazon needed 27 years to attain. The implied growth rate is substantial at 41% per year for a decade.

To appreciate what a P/S of 20 means, we share the ratio of the 20 largest US stocks below. Broadcom at 29.2 and Nvidia at 24.9 are the only two above 20, and both are growing rapidly with enormous profits.

Amazon’s single best ten-year revenue stretch, from 1997 to 2007, produced a 59% compound annual growth rate. But Amazon started with $148 million in sales and was just beginning to expand beyond books. SpaceX began at $18.7 billion, 126 times Amazon’s starting point. Growth rates achievable from a small base are significantly easier than from a large one, which is precisely why only a handful of companies have ever sustained 40%+ growth for a full decade.

Time Out: What A P/S Of 20 Implies

It’s worth pausing to stress what a P/S ratio of 20 implies. The best way to do so is to share the advice Scott McNealy from Sun Microsystems gave his shareholders in 2002.  

‘At 10 times revenues, to give you a 10-year payback, I have to pay you 100% of revenues for 10 straight years in dividends. That assumes I can get that by my shareholders. That assumes I have zero cost of goods sold, which is very hard for a computer company. That assumes zero expenses, which is really hard with 39,000 employees. That assumes I pay no taxes, which is very hard. And that assumes you pay no taxes on your dividends, which is kind of illegal. And that assumes with zero R&D for the next 10 years, I can maintain the current revenue run rate. Now, having done that, would any of you like to buy my stock at $64? Do you realize how ridiculous those basic assumptions are? You don’t need any transparency. You don’t need any footnotes. What were you thinking?’— Scott McNealy, Business Week, 2002

Elon Musk’s Growth Forecast

Elon Musk’s forward guidance warrants caution, as it is very aggressive. Days after the IPO, Musk posted the comment below on X.  Growing from $18.7 billion in 2025 to $1 trillion in 2030 is a 53-fold increase in five years, a compound growth rate of roughly 122% per year, more than double Amazon’s best-ever pace and from a base thousands of times larger.

Suppose Musk delivers. The shareholder outcome still hinges entirely on the multiple. If the market awards a $1 trillion revenue base Amazon’s current 3.7x P/S valuation, SpaceX’s 2030 market cap would be roughly $3.7 trillion, about a 17% annualized return from today’s price. At 20x, the same revenue produces a $20 trillion valuation and returns near 70% annually.

A 17% to 70% range on identical fundamentals illustrates the difficulty in our analysis: both variables, sales and the multiple, are unknowable, and the multiple alone can swing the outcome from ordinary to absurd.

Wall Street’s Wide View

To be clear, SpaceX is unique. Starlink’s subscriber economics provide a sustainable revenue base; the launch business has pricing power that thus far has not been challenged, and an xAI integration could, in the most optimistic scenario, open multiple trillion-dollar markets quickly. That said, analysts must carefully discount even the most tremendous forecasts.

To wit, the models from the SpaceX IPO underwriters sit far below those of Elon Musk. Morgan Stanley projects roughly $330 billion in 2030 revenue, and Goldman Sachs sees about $470 billion, both fractions of Musk’s $1 trillion.

New Street Research, which initiated coverage with a $165 target, acknowledged the bullish thesis could work but noted investors need a “20 to 25-year time frame” for the math to resolve favorably.

Morningstar, by contrast, set the fair value for SpaceX at $63. As we share below, the $63 to $401 range of analyst price targets reflects the uncertainty surrounding the company’s potential.

Summary

Amazon rewarded patient investors immensely, but it did so from a mere $438 million IPO valuation. Compounding from $1.84 trillion, as SpaceX tries, is harder by orders of magnitude. SpaceX can be a great company and still prove disappointing to its shareholders. To justify today’s price, its growth must be historically unprecedented, at a scale no company has ever operated, for longer than any growth cycle has ever lasted.

While that may sound bearish, this analysis doesn’t make SpaceX uninvestable. The stock will cycle through bullish and bearish periods as momentum ebbs and flows along a likely volatile path. Accordingly, traders will find plenty of opportunities on both sides. For those looking to buy and hold, however, the odds seem lofty. But, transcending financial forecasting, Musk has a proven track record of success, so it’s too early to count SpaceX out.  

Can SpaceX do what only a very small handful of companies have ever done, or is the market once again pricing in a future that gravity will eventually catch up with?

Tyler Durden Wed, 07/22/2026 - 12:25
Tyler Durden

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