In April 2023, FTX's bankruptcy estate sold a 5% stake in AI coding startup Cursor for $200,000. Following SpaceX's agreement to acquire the company at a $60 billion valuation, that same stake would now be worth approximately $3 billion. This development has brought attention to the significant gap between the original sale price and the current valuation, with the latter representing a substantial 15,000x return. The investment in Cursor was initially made by Alameda Research, a trading firm founded by Sam Bankman-Fried, in April 2022, with a $200,000 investment for roughly 5% of the company at a $4 million valuation.
After FTX's collapse, the court-appointed estate sold the stake for the same $200,000, resulting in a substantial missed recovery for creditors. This incident has sparked debate, particularly given Bankman-Fried's arguments that the estate's rapid liquidation of assets destroyed billions in value, and that customers could have received more if the process had held positions instead of selling them at the bottom of crypto prices. The timing of the SpaceX deal has also raised questions about the handling of FTX's bankruptcy administration, with Bankman-Fried's projection suggesting that the estate's net asset value could have reached $78 billion if assets had been held through the subsequent recovery.
The significant increase in Cursor's valuation, from its launch in early 2023 to the current $60 billion, is among the steepest in software startup history, and the forgone recovery of approximately $3 billion from the stake alone has become a notable example of the kind of value that Bankman-Fried claims the estate destroyed through forced selling.