The SPAC structure, which allows early investors to redeem shares before a merger, creates high uncertainty. Because of this risk, any company strong enough for a traditional IPO will choose that route. By definition, this leaves SPACs with a pool of weaker companies that cannot go public otherwise.

Rather than a traditional IPO, QXO acquired a small public company (SilverSun Technologies), appointed Brad Jacobs as CEO, and injected $5 billion of liquidity. This SPAC-like strategy provided immediate access to public markets and a massive capital base for acquisitions.

Many publicly traded space companies see soaring valuations disconnected from their financial reality. AST Space Mobile, for example, is valued at $30 billion despite having no commercial service and low actual revenue, fueled by hype and its positioning as a Starlink competitor.

During the 1720s South Sea Bubble, hundreds of speculative companies emerged with no revenue or clear business plans, mirroring the 2020-2021 SPAC boom. One notorious company was pitched for an "undertaking of great advantage, but nobody knows what it is." This highlights that financial vehicles designed to capitalize on market euphoria are not new.

SpaceX is targeting a record-breaking $1.75T IPO valuation, possibly while unprofitable. The strategy isn't based on conventional metrics but on Elon Musk's ability to "defy financial gravity." It leverages his reputation and a vastly larger public market (vs. the Alibaba IPO era) to command a valuation driven by future promise over current financials.

SpaceX's market cap quadrupled post-IPO, allowing them to use their highly valued, low-float stock to purchase Cursor for $60 billion in new shares. This move is seen as brilliant corporate finance, turning retail investor hype into a strategic asset for M&A.

Tesla's surprisingly low $1.7 billion IPO market cap, compared to its later trillion-dollar valuation, underscores the potential for venture-style conviction in public markets. It demonstrates how 1000x returns are possible for visionary firms that defy traditional metrics.

By acquiring Cursor with newly issued stock during a massive post-IPO rally, SpaceX leveraged its inflated, retail-driven market cap to purchase a significant asset. The value added to its market cap far exceeded the acquisition cost, showcasing a savvy corporate finance strategy for newly public companies.

Companies with long-term, capital-intensive goals and no immediate path to profitability are being valued like biotech firms. Both public and private markets are willing to fund these "moonshots" for years before revenue materializes, a model familiar in drug development but novel for mainstream tech.