SpaceX Loses $620 Billion in Value as Cursor Deal Sparks Selloff

SpaceX shares continued their sharp decline on Thursday, extending a selloff that has erased hundreds of billions of dollars from the company’s market value after investors reacted cautiously to its planned $60 billion all-stock acquisition of AI coding startup Cursor.

The stock fell more than 6% to below $179 during Thursday trading, following a nearly 5% drop on Wednesday. Since reaching a record high above $225 on Tuesday, SpaceX shares have lost roughly 20% of their value.

The decline has reduced SpaceX’s market capitalization by approximately $620 billion, dropping it to about $2.37 trillion from nearly $2.99 trillion at its peak earlier this week. The company, which briefly ranked as the world’s fourth-largest publicly traded firm ahead of Amazon and Microsoft, has now slipped to seventh place, trailing Taiwan Semiconductor Manufacturing Company, which holds a market value of about $2.38 trillion.

Investor concerns intensified after SpaceX revealed Tuesday that it would acquire Cursor in a stock-based transaction valued at $60 billion. The deal represents roughly 3.4% dilution based on the company’s $1.77 trillion IPO valuation, meaning existing shareholders will own a smaller percentage of the company after the transaction is completed.

Following the announcement, Morningstar analysts trimmed their fair value estimate for SpaceX shares from $63 to $62. The firm cited the significant share dilution created by the acquisition, though analysts noted that improved AI-related revenue could support a best-case valuation of $169 per share.

The recent downturn follows a remarkable debut period for SpaceX stock. According to a Vanda Research report released Wednesday, investors purchased $369.8 million worth of SpaceX shares during the company’s first three trading sessions, more than four times the $88.2 million invested in Nvidia over the same period.

Options trading for SpaceX also launched Tuesday, giving investors the ability to wager against the stock. Susquehanna analyst Chris Murphy wrote that there is a 15% probability the shares could lose half their value within the next three months as options activity increases market volatility.

Not all analysts share the bearish outlook. Oppenheimer analyst Timothy Horan praised the Cursor acquisition in a Thursday research note, raising his year-end price target for SpaceX to $250 from a previous estimate of $190. Horan wrote that “This deal is beneficial for both sides,” arguing that Cursor will gain access to SpaceX’s computing resources while SpaceX benefits from Cursor’s AI technology, engineering expertise, training data and customer base.

The decline in SpaceX shares has also affected CEO Elon Musk’s personal fortune. Estimates indicate Musk’s net worth fell by approximately $67.8 billion to around $1.2 trillion. Although his wealth recently surpassed $1.4 trillion during SpaceX’s three-day rally, he remains the world’s richest person by a wide margin, ahead of Larry Page, whose fortune is estimated at $300.8 billion.

SpaceX stock had surged roughly 50% above its $135 IPO price before the recent pullback, fueled by unprecedented investor demand. Even before the company’s market debut, Morningstar analysts warned that SpaceX appeared “significantly overvalued,” arguing its valuation depended heavily on technologies they described as novel and largely unproven. PitchBook analyst Franco Granda suggested in March that SpaceX could trade similarly to Tesla “on steroids,” highlighting the potential for extreme price swings. Other market observers have compared SpaceX to a meme stock, including Swissquote analyst Ipek Ozkardeskaya, who argued that many investors are purchasing shares largely because they expect others to continue driving the price higher. Ozkardeskaya also noted concerns about the company’s cash burn, saying spending on space exploration continues to outweigh gains generated by its Starlink business.