I just want to make the observation that this whole SpaceX IPO is turning out entirely unlike the CDOs that led to the 2008 financial crisis. There's no mixing of AAA level assets with a bunch of subprime stuff and then getting someone to buy it all as AAA. Not at all similar. Completely different. Will turn out just fine this time.
The assets weren’t AAA, you’re mixing it up a bond concepts. The deal had bonds that were AAA. And if you’re talking about CDOs then the assets were bonds which were usually BBB or similarly cuspy bonds.
You should learn about securitizations. It’s actually interesting. But people talk about it colloquially and so incorrectly that it’s mind dumbing.
Here’s a simplified example of how you can take something and turn it into a safe investment:
Suppose you have 10 loans and each has a 50% chance of default. Ignore coupon, and say they are $10 each. Expected value is $50
If you were to put this in a deal and cut it up into tranches, say the first tranche gets the first $10, this would be your AAA bond because odds of getting paid out you $10 would be > 99.9%. The equity (bottom tranches) would pay a lot less. For instance the expected value of the bottom half would be considerably less than $50 that is being promised. So there’s upside since you’ll be paying cents on the dollar and even though in the median scenario you’re making nothing, you have to weight the expected values of each scenario to figure out how to price it.
The problem w this model is that it only works if assets are relatively uncorrelated which wasn’t true (it was true in the past but ignored systematic risk and adverse selection in originations).
What this has to do w musk or spacex I’m still not sure
It is adversely selected, but it's not debt, it's equity, so price action can go real fast and nobody will be burned except folks who soberly-or-not opted into this. Everyone _knows_ Elon is the way he is, so nobody will be _surprised_ at things. No surprise, no crisis.
They're going to force a S&P500 index listing on IPO day so we're all going to be forced to baghold this regardless of if we want to or not unless you've got $0 in any major retirement fund.
I'm not an expert but it looks to my like 80% of my allocation won't be tracking spacex and the 20% that's in the vanguard growth index will. I assume whoever sets the rules for the fund could change the rules to say companies must be listed for X months if they want to avoid this, right?
You gotta do what you think is best, but I hope for future you's sake you decide to not pull the money out. Or if you do you have other retirement plans.
I'm trying to help my parents now their at retirement age and am seeing first hand what not planning for your future looks like. They hit retirement with nothing but a small social security check every month. Not even enough to cover rent in most places.
I don't know how much you have in your 401k, but it will be worth literally hundreds of thousands more if you pull it out when you retire. You aren't just paying the penalties now, you're paying for potentially decades of load compounding.
You could just buy deep out of money SP500 puts expiring in 1+ year. That way you would be "insured" against the bubble popping.
The thing is, every dollar you spend on insurance is a dollar (and its interest) you lose. Furthermore, we don't know when it will pop. 1 year? 5 years?
The more reasonable solution is probably gradually reduce exposure to US markets by selling SP500 shares and turning to Europe and emerging markets ETFs. No need to cash out 401k.
If you just look at the past 20 years, the US has had exceptional returns compared to the rest of the world.
The thing is, historically, high PE ratios like what we're seeing in the US do not correlate with short term returns that are as high. Expected future returns decrease as the PE ratios go up in a pretty linear fashion.
The question is, is everyone integrating a special SpaceX correction in their algorithmic trading? Because if a dip in the index due to SpaceX causes old algorithms to think it’s a more structural issue (well, more than it is), and sell on that indicator, will that cause a cascade?
Friendly reminder that SpaceX is going straight to the index—Elon agitated for it. The 401k of everybody in America is serving as a bailout fund for X and now cursor, and whatever other trash he hovers up
> Nasdaq was the first to consider a rule change that would grant mega IPOs like SpaceX early admission to its flagship Nasdaq-100 index. The exchange and index provider began a consultation period in February to assess the viability of and industry response to a proposed “fast entry” rule. The change was approved on March 30 and will be effective on May 1.
Ug wants to borrow ten of my best sticks in exchange for future options to buy berries from his friend Og. Og has a watertight deal with Oog to invest the sticks in a five year mammoth hunting expedition but Oog first needs berries to exchange for sticks to cover his exposure on berry-puts he’s take out against Urrrg’s remortgaged stick pile.
Well, I said no. Not getting burned that way again!
Well, there are some very important differences. 1) It’s super well known what’s going on with SpaceX. Every investor should know that there’s a lot of good stuff along with some steaming hot garbage. 2) SpaceX isn’t systemic to the economy. If SpaceX and all its subsidiaries shut down and its investors got nothing back, it wouldn’t be that big of a deal.
This type of bundling is just what conglomerates do. Is it a good thing? Not really. Many investors also hate this kind of stuff and avoid investing in these types of companies.
On point #2, they are trying to do that right now. If spacex is fast tracked into the indices, passive investors via index funds will be forced into buying.
Every time Musk does anything these days, it further reveals the shell game he's playing with his companies. This is going to be an Enron type of story eventually. I truly wish I had a choice to pull my tax money out of this particular subsidy.
Enron was absolute peanuts compared to the financial fraud Musk has been executing (with the apparent blessing of the SEC). At its peak Enron had a roughly $70B market cap, TSLA is currently sitting at $1.74T. We can expect similar numbers from the SpaceX IPO.
If underwriters think it’s worth $1.7T with a $16B revenue (not profit), they’re doing the same thing as the credit agencies did in 2008 by giving underwater mortgage backed securities a AAA rating.
the ability to mine the moon or asteroid belt seems extremely lucrative, the logistics of transporting materials to earth costs less than shipping them across the ocean, an astounding level of value creation.
SpaceX is _not_ profitable by most reasonable measurements of accounting. If you discount rocket depreciation costs and R&D, then yeah its profitable from starlink revenue.
The entire space launch market is about $20B with multiple competitors in 2025. And by the most generous estimates it is going to be $80B by 2035. They can reuse the rockets as much as they like, the company isn’t worth $1.7T.
You’re comparing a publicly traded company where the supply demand economics have established a price to a company whose financials are not public, and is valuing itself at $1.7T and forcing everyone’s 401Ks and pension funds to fund it. Not the same thing.
It is less about profitability and more about dilution of ownership. He seems to have a pattern of diluting the ownership of his profitable companies by folding in his less profitable/failed companies. You still own a share of a profitable company, but a smaller share, to his benefit.
How much of that profit was due to public subsidies of the sort that he killed for other companies but not for himself during his tenure as a special government employee?
> Their market share of EVs in the US went from 40.9% in Q3 2025 to 58.9% in Q4 2025.
You’re not wrong factually, but it doesn’t mean what you’re suggesting it means. Their share went up because EVs aren’t selling as much anymore. All companies including Tesla are selling fewer EVs. They just have a bigger share of the smaller pie, which isn’t exactly a success when you only sell EVs, but your competitors also sell non EVs.
I'm aware of the reason. Their market share is, nonetheless, up. That's still good for Tesla, their sales remained constant while people stopped buying other EVs.
Edit: Constant is the wrong word. Resilient or consistent is what I was trying to say.
Competitors leaving the market means less competition which is a good thing for Tesla. If the market for EVs returns in the future (if, say, the next administration reimplements the incentives), Tesla will be there to reap the benefits.
Matt Levine writes a bit about this - the Elon Musk Mars Conglomerate. And really if you're investing into e.g. SpaceX you're not investing into SpaceX you're investing into the Elon Musk Mars Conglomerate. And most people seem to want that.
Tesla's the odd one out: it's public but it's still in there, although Musk would probably prefer it to be private too.
Tesla is the free cashflow play that is probably the most important for mars as there is no distilled fermented dinosaur juice on mars, but considerably more by ratio of lithium / oil than the Earth. Our flintstone fire mobiles won’t work so well there, and battery / solar will be important there for everything, including mobility and armies of slave robots.
I'm pretty sure Tesla and SpaceX are profitable and generate tens of billions in revenue. Words mean something, saying [thing i don't like] is [bad thing] is pretty lazy. How are any of these companies at all related to Enron? Or are you just anti-conglomerate where you have some parts of the business supporting others (nothing to do w/ Enron and pretty normal, how could all business arms be equally profitable?)
Words do mean something, and you could have taken 5 minutes of research to make a reasonable counterclaim
Tesla has an insane PE ratio because it’s a casino stock (~350x). As a comparison, NVIDIA IS 40x. SpaceX
Is projected to be 300-500x. These are fantasy, completely unrealizable valuations. Similar to Enron, and Enron was over 70x. Enron wasn’t some surprise either.
Typically when PE gets out of whack, market analyzers dig into what is happening because it’s usually chicanery. No longer. Everyone is along for the ride.
PE has literally nothing to do with what Enron did which was accounting fraud + cashflow problems because they actually didnt make any money, in fact they lost tons of money and used future earnings in current reporting
Having a high pe is not fraud. There are even companies that are losing money, and they're still worth something.
When people say something is like enron, they dont mean it has a high PE. Its like saying someone is like Hitler and meaning they are a failed art student
Tesla isn't that profitable, but SpaceX is likely generating boatloads of cash. From what I can tell Starlink alone has a free positive cash flow of about $2 billion. I'm not sure what the launch business is worth, but it's likely a lot given the absence of domestic competition.
I have a suspicion the reason Musk wanted to combine SpaceX and X.ai is the latter gives him losses to write off against all that cash from the former plus a chance for a big AI payoff.
In 2024 Gwynne Shotwell said Starlink had a $600 million positive free cash flow based on $8.2 billion in revenue. Last year revenue estimates from both SpaceX and from outside people adding up new military contracts came out to about $11.8 billion. Their fixed costs haven't gone up much, so the big unknown is development costs for military contracts. I think $2 billion is a reasonable, conservative estimate.
So SpaceX bought a $60B Option on Cursor, plus a bunch of services, for $10B.
If strike date comes and Cursor is in fact worth less than $60B... they can move to acquire it for that price. Or just let it "expire". And if it's worth more, they get a savage good deal. If the services were worth $8B anyway, it's hard to lose.
It seems less crazy to me through this lens. A straight acquisition, today, at $60B would in fact be crazy.
Problem is basically, that if the option works out (Cursor truly has the talent to train a frontier model on SpaceX's infrastructure, and were simply lacking the infra before) the fair price would be way way more than $60B.
OpenAI tried to acquire Windsurf last year for $3B and couldn't.
But they also get a whole bunch of AI Services from Cursor. Other comments have noted that xAI has fallen on bad times (idk one way or the other) so perhaps they were going to spend $5B on getting these services elsewhere, anyway.
SpaceX spending $1B a month on various AI services seems ~plausible
(EDIT - Or maybe it's an IP transfer, or maybe it's over a longer time horizon. Idk but SpaceX clearly expects value from 'our work together' even if they don't exercise.)
$1B per month on AI services does not seem remotely plausible to me... Engineers don't consume that many tokens...
And on the AI development side they're the ones providing compute in the form of a "million H100 equivalent Colossus training supercomputer"... On top of the cash.
Cursor has no AI services, they do not develop their own frontier models. I see no reason to understand why $10bn for Cursor's services is an advantage xAI versus say a $10bn deal with Anthropic, OpenAI or Google.
It's true that Cursor doesn't have their own frontier models, but they are training their own models. They just aren't at frontier level yet. The $60B/$10B deal looks like a bet that this is a capital/GPU constraint rather than a capability one.
Despite their impressive ARR, Cursor faces existential threat from not only BigLabs (Claude Code, Open AI Codex) but also BigTech (AWS Kiro, Google Antigravity, MS VSCode). I am sure the usual suspects would have lined up to purchase Cursor, and the deal from xAI was probably the best of the lot. Marks an end to a remarkable sprint for a 3yo company, and an admirable exit (considering the recent discombobulation of Windsurf's), just as investor money and/or hype is going belly up.
It has shown surprising stickiness. Occupying some middle ground between full adoption and still ~in the code.
I am starting to see some potential in moving back away from pure terminal, a mixed modality with AI. But it is not in the direction of IDE in any traditional sense.
I guess the hope is that combining two sub-par coding models (xAI's grok + cursor's composer) and combining the data they have access to, they can build something that can compete with OpenAI / Anthropic in the coding space...
I guess I kinda see it... it makes sense from both points of view (xAI needs data + places to run their models, cursor needs to not be reliant on Anthropic/OpenAI).
I think I don't see it working out... I just don't see an Elon company sustaining a culture that leads to a high-quality AI lab, even with the data + compute.
Anyone saying this is an aquahire has it backwards. SpaceX is acquiring Cursor’s customers, all those enterprises including NVIDIA itself. I believe Jenson Huang is on the record about the engineers using Cursor everyday.
As far as I know, xAI’s enterprise market share is non-existent. This is their way to get some much needed customers.
NVIDIA has 42,000 employees. Even still, when their deal with Cursor comes to an end do we really expect them to stay loyal? And further, sign on with xAI?
When they could instead sign with the new hottest enterprise coding IDE (Claude, Codex, etc who are way more popular now). Maybe if it’s an acquihire, it’s the GTM/Sales that xAI is after?
I was required to use Cursor for my job when I first started, but once I figured out how to use the command line version of Codex, I kind of stopped seeing the point. It just kind of seemed like a bloated, overpriced wrapper around what I could do with the included ChatGPT membership I already had for work.
Maybe I was missing something, but I do not understand how it is worth sixty billion dollars.
Guess I'll be looking for a replacement for Cursor now...
Anyone have recommendations? I like the plan/agent mode and the fact that it's an IDE, so I can use it in the traditional way as well as by yapping with a bunch of agents. Also the Cursor rules I've curated and they do their job well.
Consider Nimbalyst, its a free visual workspace for Claude Code and Codex that has visual editing of markdown, mockups, diagrams, code with your agents with WYSYWIG diffs as well as task management and kanban session management tied into your agents. Its got a files/plan/editing mode and an agent/sessions mode.
You sour pusses are wrong. This is a smart move that amplifies a brilliant team from cursor with serious compute, raising the odds Elon can get to the frontier, which is worth so much these numbers will all look like a drop in the bucket.
This is a classic Elon move. He bundled up his company that is, shall we say, crap, into his most valuable company, then tried to hype it up as much as he could. Like when he promised Tesla cars would self drive in X years but it never happened, then pivoted to AI/robots, then re-routed Tesla’s GPUs to xAI, etc.
Cursor might not be the new hotness, but if we believe that agentic coding is the next wave and we’ve gone from asking chatbots to actually using agents for coding, then yes, this move makes sense for Elon to hype up a SpaceX IPO.
You sour pusses are wrong. This is a smart move. Cursor has a brilliant, capable team with serious model chops who will be able to boost the odds of AGI success. They also come with a revenue generating machine.
Wow, we are seeing the dark underbelly of the beast here. Nobody talks about cursor anymore for a reason. Look, I'm not saying it's not useful and discounting anyone getting value out of it...
But it's clearly not worth 60B dollars in April 2026.
Yep. there's absolutely no way that Cursor is worth that much.
for contrast, Elon paid $44b for twitter back in 2022.
When you adjust for inflation, Twitter was acquired for $49b in 2026 money. Cursor getting bought for 1.22x more is just insanity.
Elon seems unwilling to shake off the image that he has basically no idea what he's doing.
> Nikita Bier @nikitabier
>
> If you’re seeing a bunch of Japanese posts, here are some fun facts:
> Japan has more daily active users and more time spent on X than any other country in the world.
> Over two thirds of the country is monthly active on X.
> X in Japan has one of the highest penetration rates of any social network in history.
I wouldn't be so sure when "any other country except US" usually apply to everything on the Internet, except Twitter after the power transfer
No. JP activity was always second to US, only the biggest "out there". Same is true for all Twitter-like social media, such as Mastodon and Bluesky. Even VRChat doesn't have a majority Japanese userbase. Japan actually becoming the top majority anywhere is an anomaly and a major reversal of power balance.
This is actually an amazing sweetheart deal for Cursor. Many times with these high profile acquisitions, most stock is tied to LPA's and employment at the company, and also earnout provisions. The company then finds a way to parachute them out early, which both voids the earnout and their employment, thus they never vest most of the units and the few units they do vest get bought out at 409A valuations which are typically much, much lower.
In the case of Cursor this is an amazing boon as SpaceX listed at an almost 100x multiple which is absolutely staggering. Had SpaceX stayed private they could have 409a'd Cursor and got it for effectively ~100M$ cash.
Just because it's not discussed much on HN does not imply it is not relevant in the broader space. Cursor is still very much prevalent there with 1 mil DAU.
I’m curious if that 1 million DAU still holds as of today. I think it was reported last year some time aka before December when Claude code exploded. A quick google didn’t turn up any results that actually contained sources for the number.
This is the right partnership to happen. SpaceX has all the compute but is missing the talent for training LLMs, especially on the RL side. Cursor has the talent and RL stack, but doesn't have their own pretrained base model or own their compute. Both will be on a bad trajectory without cooperating because Claude Code and Codex have gained so much momentum already.
I guess it makes more sense than shoe brands pivoting to GPU provider.
Spacex already owns Twitter and xai, trying to post-rationalize with justification like they have servers doesn't make a whole lot of sense. It's all accounting at this point.
It looks like this is just an "option" to acquire Cursor at that price? Implying they only plan to exercise the option under certain conditions (such as, one might presume, Cursor actually being worth that much. As right now it definitely isn't.)
my only gripe rn is grok is still a shitty model to use. yeh it scores nearby openai and anthropic on benchmarks, but my personal experience has been underwhelming
I am so actually beyond sad that I ever trusted Musk, all the signs were there, from the lies with Tesla to the nonesensical point to point "tourist" lies, to the Mars lies, to the fact that the spaceship they are developing right now requires an actual elevator to get astronauts down, it was never meant for humans, it was meant to deploy sats in space even cheaper, outcompete the competition and basically kill human spaceflight as a result... because less profitable human rated spacecraft won't be viable.
Oh yeah, did I mention how Starlink is literally already in the close to Kessler Syndrome territory? all it would need is for a strong enough solar storm to hit their sats.
I just want to make the observation that this whole SpaceX IPO is turning out entirely unlike the CDOs that led to the 2008 financial crisis. There's no mixing of AAA level assets with a bunch of subprime stuff and then getting someone to buy it all as AAA. Not at all similar. Completely different. Will turn out just fine this time.
The assets weren’t AAA, you’re mixing it up a bond concepts. The deal had bonds that were AAA. And if you’re talking about CDOs then the assets were bonds which were usually BBB or similarly cuspy bonds.
You should learn about securitizations. It’s actually interesting. But people talk about it colloquially and so incorrectly that it’s mind dumbing.
Here’s a simplified example of how you can take something and turn it into a safe investment:
Suppose you have 10 loans and each has a 50% chance of default. Ignore coupon, and say they are $10 each. Expected value is $50
If you were to put this in a deal and cut it up into tranches, say the first tranche gets the first $10, this would be your AAA bond because odds of getting paid out you $10 would be > 99.9%. The equity (bottom tranches) would pay a lot less. For instance the expected value of the bottom half would be considerably less than $50 that is being promised. So there’s upside since you’ll be paying cents on the dollar and even though in the median scenario you’re making nothing, you have to weight the expected values of each scenario to figure out how to price it.
The problem w this model is that it only works if assets are relatively uncorrelated which wasn’t true (it was true in the past but ignored systematic risk and adverse selection in originations).
What this has to do w musk or spacex I’m still not sure
> this would be your AAA bond because odds of not getting paid out you $10 would be > 99.9%
I think you meant "the chances of getting paid", not of not getting paid.
Thanks. Updated
It is adversely selected, but it's not debt, it's equity, so price action can go real fast and nobody will be burned except folks who soberly-or-not opted into this. Everyone _knows_ Elon is the way he is, so nobody will be _surprised_ at things. No surprise, no crisis.
They're going to force a S&P500 index listing on IPO day so we're all going to be forced to baghold this regardless of if we want to or not unless you've got $0 in any major retirement fund.
What are you basing this on?
I'm not an expert but it looks to my like 80% of my allocation won't be tracking spacex and the 20% that's in the vanguard growth index will. I assume whoever sets the rules for the fund could change the rules to say companies must be listed for X months if they want to avoid this, right?
And I can change my allocation.
So far they're only getting fastracked into Nasdaq 100, not S&P 500.
Oh yes, thanks for reminding me. I’m going to cash out the 401(k).
You’ll pay massive penalties on that, another option is options (heh) but I’m not finance-literate enough to know how to pull it off.
Only penalties if you withdraw from 401k. Most 401k plans have some kind of moneymarket, bond fund, or similar
You can just reallocate away from an index fund.
I’ve made my peace with the “massive penalties”. I benefited from employer match in the past. I want the money now, not when I retire.
You gotta do what you think is best, but I hope for future you's sake you decide to not pull the money out. Or if you do you have other retirement plans.
I'm trying to help my parents now their at retirement age and am seeing first hand what not planning for your future looks like. They hit retirement with nothing but a small social security check every month. Not even enough to cover rent in most places.
I don't know how much you have in your 401k, but it will be worth literally hundreds of thousands more if you pull it out when you retire. You aren't just paying the penalties now, you're paying for potentially decades of load compounding.
You could just buy deep out of money SP500 puts expiring in 1+ year. That way you would be "insured" against the bubble popping.
The thing is, every dollar you spend on insurance is a dollar (and its interest) you lose. Furthermore, we don't know when it will pop. 1 year? 5 years?
The more reasonable solution is probably gradually reduce exposure to US markets by selling SP500 shares and turning to Europe and emerging markets ETFs. No need to cash out 401k.
You should backtest this strategy over the last 20 years before you make serious decisions off of the vibe from internet comments
20 years is not enough.
If you just look at the past 20 years, the US has had exceptional returns compared to the rest of the world.
The thing is, historically, high PE ratios like what we're seeing in the US do not correlate with short term returns that are as high. Expected future returns decrease as the PE ratios go up in a pretty linear fashion.
https://am.jpmorgan.com/us/en/asset-management/institutional...
What's the point of backtesting? Does backtesting say anything about the future?
The question is, is everyone integrating a special SpaceX correction in their algorithmic trading? Because if a dip in the index due to SpaceX causes old algorithms to think it’s a more structural issue (well, more than it is), and sell on that indicator, will that cause a cascade?
My money's all in Bitcoin pats himself on the back
Kinda shocked SpaceX hasn't bailed out the DOGE-holders at this point..
the power of yet
Friendly reminder that SpaceX is going straight to the index—Elon agitated for it. The 401k of everybody in America is serving as a bailout fund for X and now cursor, and whatever other trash he hovers up
They are going straight to the Nasdaq. Most index investors are invested in the S&P 500
Nasdaq is an exchange. S&P 500 is an index.
S&P 500 includes companies from multiple exchanges. Like Nvidia, which lists on Nasdaq.
Nasdaq 100…
https://www.morningstar.com/funds/spacex-ipo-how-index-funds...
> Nasdaq was the first to consider a rule change that would grant mega IPOs like SpaceX early admission to its flagship Nasdaq-100 index. The exchange and index provider began a consultation period in February to assess the viability of and industry response to a proposed “fast entry” rule. The change was approved on March 30 and will be effective on May 1.
We are better now that we learned from the first time.
Ug wants to borrow ten of my best sticks in exchange for future options to buy berries from his friend Og. Og has a watertight deal with Oog to invest the sticks in a five year mammoth hunting expedition but Oog first needs berries to exchange for sticks to cover his exposure on berry-puts he’s take out against Urrrg’s remortgaged stick pile.
Well, I said no. Not getting burned that way again!
Learned how to get the general public to directly put their money into it this time with the ETF shenanigans
Institutional investors (ex: pension funds) matter more for such mega IPOs than general public, and those probably like SPAC-like supercorps?
Well, there are some very important differences. 1) It’s super well known what’s going on with SpaceX. Every investor should know that there’s a lot of good stuff along with some steaming hot garbage. 2) SpaceX isn’t systemic to the economy. If SpaceX and all its subsidiaries shut down and its investors got nothing back, it wouldn’t be that big of a deal.
This type of bundling is just what conglomerates do. Is it a good thing? Not really. Many investors also hate this kind of stuff and avoid investing in these types of companies.
On point #2, they are trying to do that right now. If spacex is fast tracked into the indices, passive investors via index funds will be forced into buying.
Every time Musk does anything these days, it further reveals the shell game he's playing with his companies. This is going to be an Enron type of story eventually. I truly wish I had a choice to pull my tax money out of this particular subsidy.
Enron was absolute peanuts compared to the financial fraud Musk has been executing (with the apparent blessing of the SEC). At its peak Enron had a roughly $70B market cap, TSLA is currently sitting at $1.74T. We can expect similar numbers from the SpaceX IPO.
Tesla is profitable, as a matter of public record. And SpaceX is, by all accounts, extremely profitable.
They had like $16B in revenue last year, half from Starlink.
That’s just money in the door and the underwriters seem to think the business is worth $1.75T.
If underwriters think it’s worth $1.7T with a $16B revenue (not profit), they’re doing the same thing as the credit agencies did in 2008 by giving underwater mortgage backed securities a AAA rating.
It's not the same at all. Do you know how an IPO roadshow works at all or are you just spouting bullshit?
Do you have any evidence or analysis to back that up? How are those similar?
They are decades ahead of their nearest competition, in multiple verticals, and their barrier to entry is a literal gravity well.
the ability to mine the moon or asteroid belt seems extremely lucrative, the logistics of transporting materials to earth costs less than shipping them across the ocean, an astounding level of value creation.
This can’t a serious comment.
Did you notice the size of the Artemis rocket and the size of the payload it sends to the moon and back?
Do you expect there to be diamonds just laying these on the moon surface, no mining required.
There is no other mode of transportation cheaper than shipping across the ocean.
SpaceX is _not_ profitable by most reasonable measurements of accounting. If you discount rocket depreciation costs and R&D, then yeah its profitable from starlink revenue.
They haven't released a 10k yet so we don't know, but from what I understand SpaceX+X.ai is not GAAP profitable.
SpaceX reuses its boosters 20+ times. Surely the depreciation is tiny when compared to the revenue of 60M+ per launch?
The entire space launch market is about $20B with multiple competitors in 2025. And by the most generous estimates it is going to be $80B by 2035. They can reuse the rockets as much as they like, the company isn’t worth $1.7T.
3x growth in ten years is the “most generous” estimate?
How can you say “The company isn’t worth X”? Isn’t the company worth exactly as much as people are willing to pay for its shares?
I don’t personally think Google is worth $4T but the share price says otherwise.
You’re comparing a publicly traded company where the supply demand economics have established a price to a company whose financials are not public, and is valuing itself at $1.7T and forcing everyone’s 401Ks and pension funds to fund it. Not the same thing.
>forcing everyone’s 401Ks and pension funds to fund it.
Source?
They also have to replace 20%+ of their satellite network every year.
why is that ?
The operational lifetime of their satellites is about 5 years.
Because they fall back to the ground…
What about the R&D costs of blowing up vehicle after vehicle?
They have over 300 falcon 9 launches in a row now, just in case you’re not caught up on the latest
It is less about profitability and more about dilution of ownership. He seems to have a pattern of diluting the ownership of his profitable companies by folding in his less profitable/failed companies. You still own a share of a profitable company, but a smaller share, to his benefit.
Im also profitable as an individual. I made a $100 this week, which makes me worth at least $30M.
As was Enron
SpaceX was profitable before the xAI thing happened. Now I imagine they're way in the red.
How much of that profit was due to public subsidies of the sort that he killed for other companies but not for himself during his tenure as a special government employee?
Genuine question, how do you know that without a 10K? Have the filed any document that shows their finances?
Tesla’s profits and market share has been declining for the past few years and it’s basically an overpriced meme stock.
Their market share of EVs in the US went from 40.9% in Q3 2025 to 58.9% in Q4 2025.
You may not have noticed because positive Musk related news doesn't seem to make headlines anymore.
> Their market share of EVs in the US went from 40.9% in Q3 2025 to 58.9% in Q4 2025.
You’re not wrong factually, but it doesn’t mean what you’re suggesting it means. Their share went up because EVs aren’t selling as much anymore. All companies including Tesla are selling fewer EVs. They just have a bigger share of the smaller pie, which isn’t exactly a success when you only sell EVs, but your competitors also sell non EVs.
I'm aware of the reason. Their market share is, nonetheless, up. That's still good for Tesla, their sales remained constant while people stopped buying other EVs.
Edit: Constant is the wrong word. Resilient or consistent is what I was trying to say.
Competitors leaving the market means less competition which is a good thing for Tesla. If the market for EVs returns in the future (if, say, the next administration reimplements the incentives), Tesla will be there to reap the benefits.
> their sales remained constant while people stopped buying other EVs.
Their sales did not remain constant.
Tesla has a P/E ratio of 364.981. It's blatant fraud.
I'm not sure I follow, here. What about this makes you think this is a shell game?
Matt Levine writes a bit about this - the Elon Musk Mars Conglomerate. And really if you're investing into e.g. SpaceX you're not investing into SpaceX you're investing into the Elon Musk Mars Conglomerate. And most people seem to want that.
Tesla's the odd one out: it's public but it's still in there, although Musk would probably prefer it to be private too.
> Elon Musk Mars Conglomerate
That’s SpaceX’s version of Tesla’s self driving car pipe dream
Edit - I use self-driving car and Autopilot interchangeably
It's so pipe-dreamy that I used it for an hour today through SF rush hour traffic. Clearly never going to work though, right? right???
Can confirm. Terraformed mars is coming by the end of the year.
Isn't Tesla FSD good enough and trending in the right direction to be called a "pipe dream"?
Tesla is the free cashflow play that is probably the most important for mars as there is no distilled fermented dinosaur juice on mars, but considerably more by ratio of lithium / oil than the Earth. Our flintstone fire mobiles won’t work so well there, and battery / solar will be important there for everything, including mobility and armies of slave robots.
I'm pretty sure Tesla and SpaceX are profitable and generate tens of billions in revenue. Words mean something, saying [thing i don't like] is [bad thing] is pretty lazy. How are any of these companies at all related to Enron? Or are you just anti-conglomerate where you have some parts of the business supporting others (nothing to do w/ Enron and pretty normal, how could all business arms be equally profitable?)
Words do mean something, and you could have taken 5 minutes of research to make a reasonable counterclaim
Tesla has an insane PE ratio because it’s a casino stock (~350x). As a comparison, NVIDIA IS 40x. SpaceX Is projected to be 300-500x. These are fantasy, completely unrealizable valuations. Similar to Enron, and Enron was over 70x. Enron wasn’t some surprise either.
Typically when PE gets out of whack, market analyzers dig into what is happening because it’s usually chicanery. No longer. Everyone is along for the ride.
PE has literally nothing to do with what Enron did which was accounting fraud + cashflow problems because they actually didnt make any money, in fact they lost tons of money and used future earnings in current reporting
Having a high pe is not fraud. There are even companies that are losing money, and they're still worth something.
When people say something is like enron, they dont mean it has a high PE. Its like saying someone is like Hitler and meaning they are a failed art student
> How are any of these companies at all related to Enron?
There's a lot of parallels:
* Circular transactions between companies under the same control
* Using SPVs to keep debt off the books
* The supplier funding its own customer through investment to inflate revenue on both ends
* Valuations driven by a hyped up narrative and decoupled from actual fundamentals
SpaceX bought nearly 20% of Cyber Trucks sold in Q4. That makes me question the level of real profitability.
Tesla isn't that profitable, but SpaceX is likely generating boatloads of cash. From what I can tell Starlink alone has a free positive cash flow of about $2 billion. I'm not sure what the launch business is worth, but it's likely a lot given the absence of domestic competition.
I have a suspicion the reason Musk wanted to combine SpaceX and X.ai is the latter gives him losses to write off against all that cash from the former plus a chance for a big AI payoff.
Genuine question, how do you know that without a 10K? Have the filed any document that shows their finances?
In 2024 Gwynne Shotwell said Starlink had a $600 million positive free cash flow based on $8.2 billion in revenue. Last year revenue estimates from both SpaceX and from outside people adding up new military contracts came out to about $11.8 billion. Their fixed costs haven't gone up much, so the big unknown is development costs for military contracts. I think $2 billion is a reasonable, conservative estimate.
There's a few ways
They're prepping for an IPO and there have been some anonymous insider reports of the figures in the press
There are industry estimates
Much of their income comes from public contracts
pointers?
Genuine question, how do you know that without a 10K? Have the filed any document that shows their finances?
So SpaceX bought a $60B Option on Cursor, plus a bunch of services, for $10B.
If strike date comes and Cursor is in fact worth less than $60B... they can move to acquire it for that price. Or just let it "expire". And if it's worth more, they get a savage good deal. If the services were worth $8B anyway, it's hard to lose.
It seems less crazy to me through this lens. A straight acquisition, today, at $60B would in fact be crazy.
Paying $10B for the option is also crazy though. Paying $10B for the thing outright and not just an option would be absurdly high.
Problem is basically, that if the option works out (Cursor truly has the talent to train a frontier model on SpaceX's infrastructure, and were simply lacking the infra before) the fair price would be way way more than $60B.
OpenAI tried to acquire Windsurf last year for $3B and couldn't.
It reportedly has a $2B ARR, and a 5x multiplier doesn't seem insane to me, but who knows, honestly
But it's paying a 5x ARR multiplier for the right to buy at a 30x multiplier.
2B ARR at what cost base?
But they also get a whole bunch of AI Services from Cursor. Other comments have noted that xAI has fallen on bad times (idk one way or the other) so perhaps they were going to spend $5B on getting these services elsewhere, anyway.
SpaceX spending $1B a month on various AI services seems ~plausible
(EDIT - Or maybe it's an IP transfer, or maybe it's over a longer time horizon. Idk but SpaceX clearly expects value from 'our work together' even if they don't exercise.)
$1B per month on AI services does not seem remotely plausible to me... Engineers don't consume that many tokens...
And on the AI development side they're the ones providing compute in the form of a "million H100 equivalent Colossus training supercomputer"... On top of the cash.
Cursor has no AI services, they do not develop their own frontier models. I see no reason to understand why $10bn for Cursor's services is an advantage xAI versus say a $10bn deal with Anthropic, OpenAI or Google.
It's true that Cursor doesn't have their own frontier models, but they are training their own models. They just aren't at frontier level yet. The $60B/$10B deal looks like a bet that this is a capital/GPU constraint rather than a capability one.
Those other companies wouldn't also toss in a purchase option.
But I agree that it's hard to articulate what Cursor services you could blow this much money on.
Maybe it is all just an option! Or maybe they get a bunch of IP either way?
Plausible how? Explain please.
Tokens. Tokens spawning sub agents using more tokens. Maybe some training too.
I didn't say it was Wise.
I said it seems within possibility for this, very particular, corporation.
Despite their impressive ARR, Cursor faces existential threat from not only BigLabs (Claude Code, Open AI Codex) but also BigTech (AWS Kiro, Google Antigravity, MS VSCode). I am sure the usual suspects would have lined up to purchase Cursor, and the deal from xAI was probably the best of the lot. Marks an end to a remarkable sprint for a 3yo company, and an admirable exit (considering the recent discombobulation of Windsurf's), just as investor money and/or hype is going belly up.
It has shown surprising stickiness. Occupying some middle ground between full adoption and still ~in the code.
I am starting to see some potential in moving back away from pure terminal, a mixed modality with AI. But it is not in the direction of IDE in any traditional sense.
I guess the hope is that combining two sub-par coding models (xAI's grok + cursor's composer) and combining the data they have access to, they can build something that can compete with OpenAI / Anthropic in the coding space...
I guess I kinda see it... it makes sense from both points of view (xAI needs data + places to run their models, cursor needs to not be reliant on Anthropic/OpenAI).
I think I don't see it working out... I just don't see an Elon company sustaining a culture that leads to a high-quality AI lab, even with the data + compute.
https://www.facebook.com/share/1D4kkdrAjn/?mibextid=wwXIfr
Anyone saying this is an aquahire has it backwards. SpaceX is acquiring Cursor’s customers, all those enterprises including NVIDIA itself. I believe Jenson Huang is on the record about the engineers using Cursor everyday.
As far as I know, xAI’s enterprise market share is non-existent. This is their way to get some much needed customers.
NVIDIA has 42,000 employees. Even still, when their deal with Cursor comes to an end do we really expect them to stay loyal? And further, sign on with xAI?
When they could instead sign with the new hottest enterprise coding IDE (Claude, Codex, etc who are way more popular now). Maybe if it’s an acquihire, it’s the GTM/Sales that xAI is after?
I was required to use Cursor for my job when I first started, but once I figured out how to use the command line version of Codex, I kind of stopped seeing the point. It just kind of seemed like a bloated, overpriced wrapper around what I could do with the included ChatGPT membership I already had for work.
Maybe I was missing something, but I do not understand how it is worth sixty billion dollars.
It's not. It's a glorified code editor with no moat. Those are (massive) bubble prices.
Glad I’m not the only one who feels this way. Even though I personally use Cursor, there’s no way it’s even a fraction of $60B
Guess I'll be looking for a replacement for Cursor now...
Anyone have recommendations? I like the plan/agent mode and the fact that it's an IDE, so I can use it in the traditional way as well as by yapping with a bunch of agents. Also the Cursor rules I've curated and they do their job well.
Consider Nimbalyst, its a free visual workspace for Claude Code and Codex that has visual editing of markdown, mockups, diagrams, code with your agents with WYSYWIG diffs as well as task management and kanban session management tied into your agents. Its got a files/plan/editing mode and an agent/sessions mode.
I briefly used Cursor but stopped and went back to VSCode after the 3.0 rewrite when they ditched it.
You sour pusses are wrong. This is a smart move that amplifies a brilliant team from cursor with serious compute, raising the odds Elon can get to the frontier, which is worth so much these numbers will all look like a drop in the bucket.
This is a classic Elon move. He bundled up his company that is, shall we say, crap, into his most valuable company, then tried to hype it up as much as he could. Like when he promised Tesla cars would self drive in X years but it never happened, then pivoted to AI/robots, then re-routed Tesla’s GPUs to xAI, etc.
Cursor might not be the new hotness, but if we believe that agentic coding is the next wave and we’ve gone from asking chatbots to actually using agents for coding, then yes, this move makes sense for Elon to hype up a SpaceX IPO.
You sour pusses are wrong. This is a smart move. Cursor has a brilliant, capable team with serious model chops who will be able to boost the odds of AGI success. They also come with a revenue generating machine.
Wow, we are seeing the dark underbelly of the beast here. Nobody talks about cursor anymore for a reason. Look, I'm not saying it's not useful and discounting anyone getting value out of it...
But it's clearly not worth 60B dollars in April 2026.
Yep. there's absolutely no way that Cursor is worth that much.
for contrast, Elon paid $44b for twitter back in 2022. When you adjust for inflation, Twitter was acquired for $49b in 2026 money. Cursor getting bought for 1.22x more is just insanity.
Elon seems unwilling to shake off the image that he has basically no idea what he's doing.
I certainly wouldn't mind having that image if it meant being the wealthiest man in the world.
I think X paid for itself, so it worked our for him.
Source?
It paid in influence, not dollars. Billionaires don't buy newspapers or social media platforms because they think they are good businesses.
1: https://twitter.com/nikitabier/status/2037764895064867061
I'm pretty sure that claim about Japanese Twitter activity was true for most of the site's history pre acquisition
No. JP activity was always second to US, only the biggest "out there". Same is true for all Twitter-like social media, such as Mastodon and Bluesky. Even VRChat doesn't have a majority Japanese userbase. Japan actually becoming the top majority anywhere is an anomaly and a major reversal of power balance.
It is not cash though. SpaceX does not have $60B liquid cash instruments.
More accurately it is 3.4% of SpaceX at the last rumored valuation of $1.75T.
No longer rumored as they filed for IPO!
This is actually an amazing sweetheart deal for Cursor. Many times with these high profile acquisitions, most stock is tied to LPA's and employment at the company, and also earnout provisions. The company then finds a way to parachute them out early, which both voids the earnout and their employment, thus they never vest most of the units and the few units they do vest get bought out at 409A valuations which are typically much, much lower.
In the case of Cursor this is an amazing boon as SpaceX listed at an almost 100x multiple which is absolutely staggering. Had SpaceX stayed private they could have 409a'd Cursor and got it for effectively ~100M$ cash.
Until there is public S-1 and a price range which very much could change during the roadshow, there is no known valuation or range.
There's not going to be $60B of exit liquidity if/when spacex IPOs. Maybe the suckers will be banks lending against the bubble valuation.
A crazy and lucky bailout for Cursor + investors.
Forget bailout, this is a massive payday for them
Elon got snowed…
Which includes OpenAI, btw.
Not just OpenAI, but OpenAI and OpenAI[1].
1: https://cursor.com/blog/series-a
The only reason I haven't switched back to VS Code is pure laziness, not using any AI features in Cursor other than resolving diffs these days.
Just because it's not discussed much on HN does not imply it is not relevant in the broader space. Cursor is still very much prevalent there with 1 mil DAU.
I’m curious if that 1 million DAU still holds as of today. I think it was reported last year some time aka before December when Claude code exploded. A quick google didn’t turn up any results that actually contained sources for the number.
It makes you wonder how much of this is essentially money laundering.
This is the right partnership to happen. SpaceX has all the compute but is missing the talent for training LLMs, especially on the RL side. Cursor has the talent and RL stack, but doesn't have their own pretrained base model or own their compute. Both will be on a bad trajectory without cooperating because Claude Code and Codex have gained so much momentum already.
I feel Cursor isnt’t even worth $6B. What is the moat, the value, the sauce here?
The “apply” model to turn LLM output into code changes?
I like SpaceX a lot but this really doesn’t make sense at $60B
$60 billion with a B???
Cursor ($60b) being valued the same as Twitter ($51b inflation adjusted) is _willlld_
I guess it makes more sense than shoe brands pivoting to GPU provider.
Spacex already owns Twitter and xai, trying to post-rationalize with justification like they have servers doesn't make a whole lot of sense. It's all accounting at this point.
I'm out of the loop - what moat does Cursor even have now, and why is it worth $60B?
Why did a shoe company get $50 million in funding for their AI pivot?
Because VCs are braindead... I see your point.
What are the implications of this for Cursor being model agnostic?
https://xcancel.com/trq212/status/2046713419978453374
It looks like this is just an "option" to acquire Cursor at that price? Implying they only plan to exercise the option under certain conditions (such as, one might presume, Cursor actually being worth that much. As right now it definitely isn't.)
Guardian Link:
https://www.theguardian.com/technology/2026/apr/21/spacex-cu...
Good on them to get $10B breakup terms, after the Twitter shitshow
Hard to know whether development will remain an activity that lives on a local machine for much longer.
This could be a lot of money to spend to acquire users that may not be sticky.
I wonder if they are actually 'acquiring' some of the existing contracts between Cursor and X/Y/Z rather than the product itself.
my only gripe rn is grok is still a shitty model to use. yeh it scores nearby openai and anthropic on benchmarks, but my personal experience has been underwhelming
every wrapper either gets acquired or stays long enough to be a zombie startup
Well I am glad I built my own IDE now so I can switch off of cursor and don’t have to participate in training the model of an aspiring monopoly.
DM me if you want an invite. I am keeping it to a small on purpose.
Complete waste of $60B. It's just a prompt+tools. This is how you destroy SpaceX from the inside.
I am so actually beyond sad that I ever trusted Musk, all the signs were there, from the lies with Tesla to the nonesensical point to point "tourist" lies, to the Mars lies, to the fact that the spaceship they are developing right now requires an actual elevator to get astronauts down, it was never meant for humans, it was meant to deploy sats in space even cheaper, outcompete the competition and basically kill human spaceflight as a result... because less profitable human rated spacecraft won't be viable.
Oh yeah, did I mention how Starlink is literally already in the close to Kessler Syndrome territory? all it would need is for a strong enough solar storm to hit their sats.
My Hair's on Fire! OMG, Republicans Capitalist OMG Pigs! OMG!
reading this thread, I seem to be the only cursor user on earth on the free tier using tab-completes.
A text editor?
cursor was interesting about a year ago
RIP Cursor.
but What exactly is SpaceX doing in the AI Space (Pun Intended) and Why?
these are weird times...
Looking forward to seeing where this goes, both companies have a reputation for engineering excellence.
Seriously DONT CHANGE THE FUCKING POST TITLE AFTER SOMEONE HAS COMMENTED
Musk must be chronically surrounded by yes-men.
immediately unsubscribed from Cursor. Hello OpenCode!
same. moving to zed
lol. Top business genius being a genius again, I see.