_{DEAL OF THE MONTH}

SpaceX Clicks on Cursor

SpaceX priced its IPO at $135 a share on June 12. It opened trading at $150 with many retail investors piling in driving the price even higher. Four days later it touched an all-time high of $225.64, briefly making it the fourth most valuable company in America and adding roughly $740 billion in market cap in less than a week.

Quite the first week on the job.

On Tuesday June 16, riding that high, SpaceX announced it would acquire Cursor, the AI coding tool, for $60 billion in an all-stock deal.

The math was, for about four days, beautiful. SpaceX’s stock had gained more than the entire cost of the acquisition before the acquisition was even announced.

The company didn’t touch its $86 billion IPO war chest. It didn’t take on debt. It paid for the whole thing with paper that had appreciated faster than the deal could be signed. Buying a $60 billion company felt, briefly, like finding money in an old coat.

Then the coat got a lot lighter.

By June 22, SpaceX shares had fallen 16.4% in a single session, their worst day since the IPO, closing at $154.60. 

The trigger was the company confirming a $20 billion bond offering (later upsized to $25 billion) to refinance the bridge loan it took out to fund the xAI merger back in February.

Translation, for anyone who hasn’t priced a corporate bond before: the company that just raised $86 billion eleven days earlier needed to go raise debt too, and the market read that as “hmmm, maybe this is not the money tree we were promised.”

The stock has kept falling faster than a SpaceX rocket en route back to Starbase.

SPCX has fallen more than 30% from its peak and was trading below its IPO opening price of $150, at one point dipping under $147. A stock that had, for one glorious week, made everyone who bought at the open feel like a genius, was now making them feel like they’d bought a timeshare.

The same people who complained about not getting their full allocation were probably thanking their brokers for limiting the exposure.

The $60 billion Cursor deal that looked like found money on June 16 now represents a meaningfully larger chunk of the company than it did when the ink dried. Funny how that works.

To be fair to SpaceX’s balance sheet, the bond sale itself went well. The $25 billion offering drew $89 billion in demand, a 3.5x oversubscription that is one of the largest investment-grade order books ever recorded.

Moody’s, Fitch, and S&P all assigned investment-grade ratings on June 18, the same day the stock fell nearly 4% anyway, which is the bond market and the equity market looking at the exact same company and reaching two completely different verdicts. Bond investors (and the ratings agencies) clearly believe Starlink’s cash flow can service the debt.

Equity investors are apparently still doing math on the xAI side of the ledger, where the operating loss alone in 2025 was $6.355 billion, enough to wipe out the entirety of Starlink’s $4.4 billion operating profit and then some.

Worth noting: every single one of xAI’s 11 co-founders left the company before the IPO even happened.

Musk himself said in March that xAI “was not built right the first time around” and that he’s rebuilding it “from the foundations up.” So the company decided the correct next move was to spend $60 billion buying a coding tool to bolt onto the AI division that just lost its entire founding team. Bold strategy.

The Cursor deal itself still represents just 15x forward revenue and 3.4% dilution at the IPO valuation, which by AI-deal standards is almost conservative.

Cursor’s market share in AI coding fell from 41% to 26% between June 2025 and May 2026 as Claude Code and OpenAI’s Codex ate its lunch, so SpaceX is effectively buying a company that’s losing a war in order to give Grok a weapon in it.

One analyst, with admirable restraint, said simply: “I’m just not sure what else he wants to add to the portfolio.” At this point neither are we, but we assume there’s a slide deck somewhere with the word “synergy” on it forty separate times. Btw - odds are the next bolt-on to SpaceX is Tesla.

PitchBook's Franco Granda described the underlying mechanic well, before the stock decided to make his quote slightly less impressive: "The IPO gave SpaceX a valuation and a premium currency. SpaceX can now buy a company that size without touching cash, debt, or IPO proceeds, and the higher the stock runs, the cheaper the deal feels."

The corollary, which nobody said out loud at the time but is now extremely relevant, is that the lower the stock runs, the more expensive the deal feels too. The flywheel works in both directions.

SpaceX just found that out the hard way, eleven days into being a public company. That said, Elon has a trillion more dollars at risk on SpaceX than I do, so I'm sure he'll figure it out.

_{PRESENTED BY DILIGENCESQUARED}

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_{SPONSOR DEAL OF THE MONTH}

KKR Counts on Crowe

In a week full of healthcare deals, I chose to do a FIG deal. God, I hate healthcare. Anyway, let's jump into KKR attempting to buy free audit services for life.

On June 11, Crowe LLP agreed to sell a majority stake to KKR and co-investors in a deal valuing the firm at nearly $3 billion. 

Crowe is the 12th-largest accounting firm in the US, with roughly $1.39 billion in annual revenue and 9,000 employees domestically. Crowe’s existing partners retain a minority stake.

For most of the last century, the accounting profession ran on one unbreakable rule: outside capital does not get to own audit firms.

State licensing laws generally require that the people performing audits also own the firm doing the auditing, which has historically kept private equity out of the industry’s core business entirely. That rule is now being worked around at scale, and Crowe just became the latest firm to find the workaround.

The mechanism is something called an alternative practice structure. Crowe is splitting itself into two entities: a regulated audit and attest arm that stays owned by its partners, and a separate advisory and consulting business that KKR’s money actually buys into. On paper, the audit function remains untouched by private capital.

In practice, the firm that does both is now substantially funded, resourced, and influenced by a private equity firm with $25.65 billion in annual revenue across its own platform. It’s the corporate equivalent of saying you didn’t let your roommate move in, you just gave him a key, paid his half of the rent, and let him redecorate.

Crowe joins a list that is getting long fast. Baker Tilly, Grant Thornton, CohnReznick, and EisnerAmper have all taken PE money in recent years. Among the top 20 US accounting firms, only CLA and Plante Moran remain structurally untouched by outside capital.

CEO Steven Strammello told the Wall Street Journal that the competitive environment for accounting firms has been “evolving rapidly,” which is the diplomatic way of saying that if you don’t take the AI investment dollars, the firm next door will, and then they’ll out-automate you on audit and tax work that used to require armies of associates.

KKR’s Chris Harrington framed the deal as being about funding “next-generation client capabilities,” which is private equity speak for AI tooling and bolt-on acquisitions.

The more interesting read, from analysts covering the deal, is that KKR isn’t pricing Crowe like a sleepy mid-tier accounting shop. They’re pricing it like a finance-and-accounting outsourcing platform, the same tier occupied by Genpact, WNS, and Cognizant.

If that thesis holds, every top-20 accounting firm that hasn’t yet taken outside capital just became a more obvious takeover target, whether they want to admit it or not.

The deal also lands on top of a broader trend of private credit quietly funding the entire wave. KKR is reportedly in talks to raise roughly $1 billion in debt financing to support the transaction, with pricing conversations happening around SOFR+550 basis points.

That’s the same private credit machine that has funded most of the accounting industry’s PE consolidation since 2021, working in the background while the press release talks about AI and client capabilities.