In a striking 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 recent agreement to acquire the company at a $60 billion valuation. This development has shed light on one of the largest missed recoveries in crypto history. Elon Musk's SpaceX has secured the right to purchase Cursor later this year for $60 billion or pay a $10 billion breakup fee if the full acquisition does not proceed, as part of his strategy to close the gap with competitors in the AI coding tools space.
The deal's timing is noteworthy, given SpaceX's planned initial public offering, which targets a $2 trillion valuation. The crypto aspect of this story revolves around Alameda Research's $200,000 investment in Anysphere, the company behind Cursor, in April 2022.
This investment, which represented roughly 5% of the company at a $4 million valuation, was sold by the FTX estate for the same amount a year later, following the collapse of FTX and Alameda. The significant disparity between the sale price and the current valuation has sparked debate, particularly given the arguments made by Sam Bankman-Fried, the founder of FTX, who is currently serving a 25-year federal sentence. Bankman-Fried has consistently argued that the FTX estate's decision to liquidate assets too quickly during the bankruptcy process destroyed billions of dollars in value, and that customers could have received greater compensation if the assets had been held instead of sold. The Cursor stake's remarkable trajectory, with its value increasing from $200,000 to $3 billion in just three years, serves as a prime example of the potential value that could have been realized.
While FTX customers have been reimbursed in full, plus interest, under the bankruptcy distribution plan, they have not benefited from the substantial upside of the assets sold during the bankruptcy process. This oversight is likely to feature prominently in ongoing discussions about the case, including Bankman-Fried's own advocacy for a pardon.