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SpaceX paid that $60 billion entirely in stock. In other words, they traded 2% of their own inflated stock value, for 100% of Cursor's inflated stock value. Thi
by wavemode 4mo ago
SpaceX paid that $60 billion entirely in stock. In other words, they traded 2% of their own inflated stock value, for 100% of Cursor's inflated stock value. This is actually a great deal for SpaceX.
If they had paid $60 billion dollars in cash for Cursor, it would have been a ripoff.
- ajmurmann 4mo agoCouldn't they just have sold their stock for dollars?
- wavemode 4mo agoDumping $60 billion worth of shares would tank the stock price, causing it to not convert into anywhere near $60 billion.
- bruce511 4mo agoYou can't sell 60b worth of stock without moving the price. It has to be dribbled out over time. Some buyees of course insist on cash. Which moves the effect of stock sales onto the buyer. Most buyers would prefer to pay in stock as it doesn't impact cash flow at all. So, a all-stock deal already has the future-price of the stock built in. Which probably (but not necessarily) inflates the headline number. In other words, let's say I offer you 60b stock[1], or 30b cash. Which would you take? If you're risk adverse, take 30b cash. You can buy a nice diversified portfolio with that. If you're confident SpaceX will be around say 10 years from now, and still worth good money, then take the 60b and sell it slowly over a long time. It's a big bet though (if SpaceX goes into liquidation, all stock immediately goes to 0.) Of course if you think the price will ultimately go up, then it's a good choice as well. [1] there are likely some boundaries which dictate when you can start selling the stock.
- ajmurmann 4mo agoGiven the company is supposedly worse $2.5T, one would think the impact of selling 2.4% of that would have a fairly small impact on the price.
- deleted 4mo ago[deleted]