On June 16, SpaceX (SPCX) announced it would acquire Cursor’s parent company, Anysphere, in an all-stock deal for $60 billion of Class A common stock, without using any IPO-raised cash. Spurred by the acquisition news, the market cap surged to a peak intraday of $2.66 trillion, briefly surpassing Amazon and Microsoft. The closing market cap was $2.658 trillion, making it the world’s fifth-largest company by market value.
Cursor’s business scale and SpaceX’s logic for integrating computing power
Founded in 2022, Cursor’s AI coding tool has reached annualized B2B revenue of $2.6 billion, but a lack of sufficient computing power has been its main development bottleneck (as reported by CNBC). SpaceX already absorbed Elon Musk’s xAI into its company in February this year; after acquiring Cursor, Anysphere’s developer data is expected to help improve AI models such as Grok, while SpaceX’s computing resources would fill Cursor’s growth bottleneck.
SpaceX also said it will roll out new AI models on the Cursor platform soon, and will publish Grok Build, a coding assistant co-trained by both sides over several months. SpaceX’s IPO filing previously mentioned a potential market of $28.5 trillion, with enterprise AI making up a substantial portion.
Deal terms: to be completed in Q3 2026, 3.4% dilution, and a termination fee up to $10 billion
According to the announcement, the acquisition is expected to close in the third quarter of 2026, pending regulatory approvals. The all-stock transaction would dilute SpaceX’s equity by about 3.4% relative to the IPO valuation. If the deal falls apart due to specific factors, SpaceX would have to pay a termination fee ranging from $1.5 billion to $10 billion, or provide $8.5 billion in computing resources.
Reuters also noted that SpaceX’s financials show: between 2023 and 2025, SpaceX’s annual revenue grew from about $10 billion to nearly $20 billion, but in 2025 net profit swung to a massive loss of nearly $5 billion, mainly due to heavy AI spending.
180 million option contracts on day one: intraday data and the gamma squeeze mechanism
SpaceX’s first batch of options officially began trading the night the acquisition announcement was released. On the first day, 1.8 million contracts traded, far exceeding Meta’s 365,000-contract record on its first day in 2012. Henry Schwartz, vice president of derivatives market intelligence at Cboe, said this trading volume was unprecedented and was driven mainly by retail investors. On that day, the trading ratio between call and put options was 1.3:1, and the total premium amounted to $2.8 billion.
SpotGamma founder Brent Kochuba analyzed that demand for call options was highly skewed, creating a “gamma squeeze,” prompting options market makers to buy large amounts of SpaceX’s underlying stock to hedge risk, further pushing up the share price.
Public warnings from market analysts about SpaceX’s valuation
Dan Niles, founder of Niles Investment Management, pointed out that before SpaceX was included in major indexes like the Nasdaq, market forces and derivatives would likely keep pushing up the stock price. But, like meme-stock mania, valuations can be driven to unimaginable highs and then need to revert to fundamentals. In the IPO, SpaceX only offered 5% of total shares (55.56 billion shares), an extremely low float that can amplify price volatility.
Jeff deGraaf, an analyst at Renaissance Macro Research, warned that historical data shows that IPO stocks with extremely strong opening performance commonly face a “hype tax” effect, with a median return of -15.6% one year after listing.
FAQ
Why did SpaceX use an all-stock deal rather than cash to acquire Cursor?
According to the announcement, SpaceX will use Class A common stock in an all-stock acquisition and will not use any cash raised from the IPO. This arrangement allows SpaceX to preserve cash to cover its massive AI infrastructure spending, while causing only about 3.4% equity dilution relative to the IPO valuation.
Had SpaceX already surpassed Amazon and Microsoft by the time it closed?
Based on the report, SpaceX’s closing market cap was $2.658 trillion, ranking fifth globally. “Surpassing Amazon” and “once beating Microsoft” were intraday events rather than closing results. At the close, SpaceX was still behind Nvidia, Alphabet, Apple, and Microsoft.
Which record did SpaceX’s first-day options trading volume break?
According to the report, SpaceX’s options traded 1.8 million contracts on the first day, breaking Meta’s 365,000-contract record set on its IPO day in 2012. It also set the highest first-day options trading volume for any IPO in U.S. stock market history.
