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 development comes as SpaceX, led by Elon Musk, aims to bridge the gap with competitors in AI coding tools. The deal allows SpaceX to purchase Cursor later this year for $60 billion or pay $10 billion if the acquisition does not proceed, with the latter serving as a breakup fee due to SpaceX's planned initial public offering targeting a $2 trillion valuation. The investment in Cursor was initially made by Alameda Research, a trading firm founded by Sam Bankman-Fried, in April 2022, for $200,000, representing a 5% stake at a $4 million valuation.
After FTX's collapse, the court-appointed estate sold the stake for the same $200,000, resulting in a significant loss of potential recovery for creditors. This incident supports Bankman-Fried's argument that the estate's rapid liquidation of assets destroyed billions in value, and the timing is particularly awkward for FTX's bankruptcy administration. The substantial difference between the sale price and the current valuation of the stake, a 15,000x return, underscores the potential value that could have been realized if the estate had held onto the assets. The FTX estate's decision to sell the stake has significant implications, particularly in light of Bankman-Fried's claims that the estate's actions resulted in the destruction of billions of dollars in value, and the fact that FTX customers, while repaid in full, did not benefit from the potential upside of the assets sold during the bankruptcy process.