Using Valuation Premiums to Buy Reality: How Fiction Becomes Currency
- Sunil Dutt Jha
- Apr 8
- 5 min read
Updated: May 26
In today's financial ecosystem, companies with modest revenues are trading at valuations that defy business logic. A firm with $500 million in revenue can command a $50 billion valuation, and nobody flinches.
But this isn’t just hype. It’s not just optimism. It’s not even irrational exuberance anymore.
It’s a system. A game. A currency.
When a company’s valuation-to-revenue ratio is 30x, 50x, or 100x, it's not just overvalued—it's weaponized.
Welcome to the real game behind the markets: Using inflated valuation premiums to buy the real economy.
Step 1: Inflate the Narrative
It starts with a story:
“We’re building AGI.”
“We’re redefining healthcare.”
“We’re building the cloud infrastructure of the future.”
Wall Street loves it. VC firms amplify it. Index funds pile in. Valuation skyrockets—not based on earnings, but on expectation.
A company generating $2 billion in revenue suddenly finds itself worth $200 billion.
That $198 billion delta?
That’s not value. That’s leverage.
Step 2: Monetize the Gap
Now the company moves. With a $198 billion “premium” above reality, it can issue new shares or take on debt secured against that inflated market cap.
It doesn’t need profit. It doesn’t need cash flow. It now has fiction-backed firepower.
They use this to:
Fuel acquisitions.
Build data centers.
Launch expansions into markets they know nothing about.
They’re not spending profits. They’re spending narrative.
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