In a stunning turn of events, a 5% stake in AI coding startup Cursor, sold by FTX's bankruptcy estate for $200,000 in April 2023, would now be valued at approximately $3 billion following SpaceX's agreement to acquire the company at a $60 billion valuation. This deal has brought attention to the significant losses incurred by FTX's estate due to the sale of assets during the bankruptcy process. SpaceX's decision to delay the acquisition until later this year, with the option to pay $10 billion if the full acquisition does not proceed, is reportedly due to its planned initial public offering, which is targeting a $2 trillion valuation.
The crypto community is abuzz with the news, particularly given the investment made by Alameda Research, the trading firm founded by Sam Bankman-Fried, in Anysphere, the company behind Cursor, for $200,000 in April 2022. This investment, which bought roughly 5% of the company at a $4 million valuation, was sold by the FTX estate for the same amount a year later, resulting in a significant loss for creditors. The gap between the sale price and the current valuation represents a staggering 15,000x return, highlighting the potential value that could have been realized if the estate had held onto the stake. This development is likely to fuel further debate about the handling of FTX's bankruptcy, particularly in light of Bankman-Fried's arguments that the estate's liquidation of assets too quickly destroyed billions in value.
The fact that FTX customers have been made whole in dollar terms under the bankruptcy's distribution plan, but did not receive the upside from the assets' subsequent growth, has sparked controversy. The case of the Cursor stake, which could have provided an additional $3 billion in recovery, is likely to be cited as a prime example of the value that was lost due to the estate's actions.