Seven trading sessions. That’s all it took for the most anticipated public offering in market history to go from euphoria to existential debate.
SpaceX (SPCX) listed on Nasdaq on June 12 at $135 per share, raising $75 billion in what became the largest IPO ever recorded. The first three days were extraordinary. By June 16, the stock had hit $225.64, a 67% gain, before a single quarterly earnings report had been filed as a public company.
Then it all started unwinding.
What’s interesting is that the decline wasn’t triggered by a product failure or a revenue miss. It was triggered by decisions management made themselves – and the market’s reaction reveals something worth paying attention to about how SPCX is actually being priced right now.
What Happened
On June 16, the same day the stock peaked, SpaceX confirmed it would acquire Anysphere, the parent company behind the AI coding tool Cursor, in a $60 billion all-stock transaction. The deal represented a 3.4% dilution at SpaceX’s IPO valuation. Shares initially surged on the announcement, briefly pushing SpaceX’s market cap above Amazon’s. Then the math set in.
Within 72 hours, SPCX had shed roughly $620 billion in market value. By June 18, the stock’s five-day volume-weighted average price sat at $181.71, meaning the average post-IPO buyer in the open market was essentially breaking even – or under water depending on when they bought.
A company that raised $75 billion in an IPO, announced a $60 billion acquisition four days later, and then disclosed plans to borrow at least another $20 billion via a bond offering left investors asking one obvious question: how much capital does this business actually need?
The Cursor Deal: Smart or Stretched?
Cursor launched in 2023 and became one of the fastest-growing startups in Silicon Valley history. By late 2025, it had raised $900 million in a Series C, followed by another $2.3 billion round. In November, the company reported it had crossed $1 billion in annualized revenue. By the time SpaceX announced the deal, that figure had reportedly climbed to approximately $2.6 billion in annualized revenue.
Here’s the part people are skipping: Cursor’s market share had actually declined from 41% in June 2025 to around 26% by May 2026, according to spending data from Ramp. The business is still growing, but the competitive position is tightening. Anthropic and OpenAI both offer rival coding tools. The deal wasn’t coming from a position of dominance – it was coming from a position of urgency.
SpaceX originally locked in the option in April: pay $60 billion to buy Cursor outright, or pay a $10 billion break-up fee and walk away. When the IPO gave the company stock worth over $2 trillion, the $60 billion all-stock acquisition became mathematically easier to execute. The transaction is expected to close in Q3 2026, pending regulatory approval.
The strategic logic is real. SpaceX merged with Elon Musk’s xAI earlier this year, and Cursor’s enterprise AI coding capabilities sit directly on top of Colossus data centers and Starlink connectivity. Folding Cursor into the group creates a vertical AI stack that no competitor currently matches: rockets, satellite internet, data centers, and software development tools. The ambition is coherent. Whether it’s worth $60 billion is a different question.
The Valuation Problem
At its IPO price of $135, SpaceX carried a price-to-sales ratio of roughly 60 – exceeding the richest valuations seen during the 2021 tech bubble. At the June 16 peak of $225.64, that multiple expanded further. The company reported a net loss of $4.9 billion for full-year 2025, a reversal from a profitable 2024, driven largely by its xAI investments.
Starlink remains the only clearly profitable segment. Everything else – Starship, xAI, and now Cursor – is a capital-intensive bet on future execution across multiple complex, high-risk initiatives. That’s not necessarily wrong as an investment thesis. But it does mean the stock is almost entirely priced on faith in flawless execution, with very little margin for error if any single segment underperforms.
There was also a structural dynamic that accelerated the decline. June 17 was the first day SPCX options began trading. Before that, short sellers had no practical mechanism to bet against the stock. The moment options opened, positioning changed fast.
Forward Scenarios
Bull case: Cursor’s enterprise AI revenue accelerates under SpaceX’s infrastructure, Starlink growth compounds, and Starship achieves commercial viability. Analysts had floated a $200+ scenario pre-IPO under exactly this combination. Index inclusion is already pulling passive capital into SPCX, providing a structural bid.
Base case: The stock consolidates between $165 and $195 through Q3 as investors wait for the first public earnings report and more detail on the Cursor integration. The bond offering, expected to be at least $20 billion, adds a near-term supply overhang. Capital allocation questions persist until management provides a clearer framework.
Bear case: Cursor integration disappoints, xAI losses widen, and the $60 valuation multiple compresses toward 30-40x as rate expectations shift. One pre-IPO analysis flagged a potential correction to $75 as a plausible bear scenario based on valuation and the rate environment.
Technical Overlay
The IPO price at $135 is the only meaningful support level that has structural significance. The stock has no long-term moving averages yet. Volume on the June 17-18 decline was heavy and sustained, which points to institutional repositioning rather than retail panic. The $175 area, which represents roughly the midpoint of the post-IPO range, is the first zone to watch for stabilization.
What to Watch
- First public earnings report – expected Q3 2026. Segment-level disclosure on Starlink, xAI, and Cursor revenue will matter enormously.
- The $20 billion bond offering terms and timeline. A large bond raise at high rates would confirm the capital burn is accelerating.
- Cursor market share data. If the decline from 41% to 26% continues post-acquisition, the deal economics look worse.
- Regulatory review of the Cursor acquisition. An all-stock $60 billion deal in AI will almost certainly draw antitrust attention.
- Options flow in SPCX. The first weeks of options trading will reveal how sophisticated money is actually positioning.
Bottom Line
SPCX is not a simple IPO story anymore. It became something more complicated almost immediately after listing. The Cursor deal, the bond offering, and the capital burn picture have turned this into a high-conviction debate between people who believe Elon Musk is building the most vertically integrated tech company in history and people who think the valuation simply doesn’t leave room for any of the risks that are already visible. Both arguments have merit. The stock sitting 22% below its week-old peak doesn’t resolve the debate – it just means the market hasn’t decided yet.
For informational purposes only.
