Software & Systems · Story 10

SpaceX Stock Plunge Wipes Out $600 Billion After Cursor Deal Spooks Investors

SpaceX stock plunged, wiping out $600 billion in market value after the company acquired Cursor, an AI coding startup, in a deal investors viewed negatively. The drop reversed a rally that had briefly pushed SpaceX's valuation ahead of Amazon and Microsoft.

This event underscores the high-stakes nature of Elon Musk's ventures, where strategic acquisitions can dramatically impact investor confidence and market valuation overnight. It also highlights the skepticism around AI-focused deals when they appear to lack clear financial justification.

Key details

The Forbes article describes the stock drop as following a deal to acquire Cursor, an AI coding assistant, which spooked investors.
The article notes that the plunge wiped out $600 billion from SpaceX's market value.
The drop occurred after a rally that had temporarily made SpaceX more valuable than Amazon and Microsoft.
Reddit comments suggest the IPO proceeds were used to pay off xAI debt and fund the Cursor purchase, with a potential $20 billion bond offering planned.

Discussion angles

Many comments argue the drop was a planned 'pump and dump' scheme rather than a reaction to the Cursor deal itself.
Software engineers in the discussion report that Cursor is losing relevance, with few still using it due to being a 'thin wrapper' around LLMs and 20% cost increase.
Some comments cite critical bugs and inability to fix them, describing Cursor as a 'vibe-coded app for vibe coding'.
Comments claim the IPO money was used to bail out Elon Musk's Twitter losses and pay off xAI debt, not just acquire Cursor.

Top comments

The top comments overwhelmingly treat the stock drop as a predictable outcome of financial engineering rather than a genuine market correction. Many express skepticism about Cursor's actual value, with software professionals noting its decline in use. There is also suspicion that the acquisition was part of a broader financial maneuver involving xAI debt and Twitter losses.

It wasn’t the cursor deal that spooked investors lol. It was architected to be a pump n dump. This is just the “dump” portion

u/arbiterxero · 6,055 score

By the way - I work in software. Most of us were religiously using Cursor like 5-6 months ago but I hardly know anyone who touches it anymore. It doesn't really do much other than being a thin wrapper around the LLMs and adding 20%+ to the cost of LLM API...

u/protomenace · 4,786 score

Do not worry! They are working on a $20 billion bond offering as we speak! The entirety of the IPO money was used to pay off xAI debt and to purchase Cursor. SpaceX bankers prepare for potential $20 billion bond offering, sources say | Reuters

u/Brennan_Schwartz · 3,251 score

Also to bail out Elon's twitter losses, though that won't get published much

u/lab-gone-wrong · 1,888 score

This is my experience, too. These days, based on some critical bugs and their inability to fix it, it appears to be a vibe-coded app for vibe coding.

u/somefunmaths · 1,825 score

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