There’s No Time for SpaceX to Buy Cursor

Traditionally the way an initial public offering works is that there is a private company, and it wants to sell its stock to public investors, so it goes out and markets itself to those investors. Along with its bankers and lawyers, the company writes a prospectus explaining its business. The prospectus will contain some standard sections: often a manifesto from the company’s founder setting out its vision and guiding philosophy, an overview of its business and the competitive landscape, a discussion of its financial results. There will be audited historical financial statements going back several years, and risk factors explaining what might go wrong.

There will also normally be a roadshow, in which the company and its advisers present the company to investors in meetings or over Zoom. The roadshow presentation will hit some of the same notes as the prospectus, though it will probably be more forward-looking, more about how much money the company will make next year than how much it made last year, more about plans than about risks. Research analysts at the company’s banks will explain their — preferably optimistic — views on the company to potential investors. Salespeople at the banks will call their customers to sell them stock.