The value of a 5% stake in AI coding startup Cursor, sold by FTX's bankruptcy estate for $200,000 in April 2023, has skyrocketed to approximately $3 billion following SpaceX's recent agreement to acquire the company at a $60 billion valuation. This development has brought attention to the significant gap between the original sale price and the current worth, with the difference representing a staggering 15,000% return. The investment was initially made by Alameda Research, a trading firm founded by Sam Bankman-Fried, in April 2022, with the company valued at $4 million at the time.
After FTX's collapse and subsequent bankruptcy, the court-appointed estate sold the stake for the same $200,000, resulting in a massive missed recovery opportunity for the estate's creditors. The timing of this revelation is particularly awkward for FTX's bankruptcy administration, as it supports Bankman-Fried's argument that the estate's rapid liquidation of assets destroyed significant value for customers.
Bankman-Fried has been advocating for a reevaluation of the bankruptcy process, suggesting that holding onto assets would have resulted in a substantially higher net asset value for FTX. The Cursor stake's remarkable growth, from a $4 million valuation to a $60 billion valuation in just three years, is a prime example of the potential upside that was missed.
While FTX customers have been repaid in full, they did not benefit from the substantial increase in value of the assets sold during the bankruptcy process, including the Cursor stake, which is now worth $3 billion.