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 worth approximately $3 billion following SpaceX's agreement to acquire the company at a $60 billion valuation. This deal, spearheaded by Elon Musk, aims to close the gap with competitors in the AI coding tools space. The acquisition is contingent on SpaceX's planned initial public offering, which targets a $2 trillion valuation, with a $10 billion breakup fee if the full acquisition does not proceed.
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 a 5% stake. However, after FTX's collapse, the court-appointed estate sold the stake for the same $200,000, resulting in a missed opportunity for creditors.
This event has sparked controversy, with Bankman-Fried arguing that the estate's liquidation of assets too quickly destroyed billions in value, and that customers could have been made whole if the process had held positions instead of selling them at the bottom of crypto prices. The timing of this revelation is particularly awkward for FTX's bankruptcy administration, as it highlights the significant upside that could have been realized if the estate had held onto the assets.
The case has also drawn attention to the advocacy efforts of Bankman-Fried's parents, who are pushing for a pardon and arguing that the case against their son should be revisited.