The value of a 5% stake in AI coding startup Cursor, sold by FTX's 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 deal, orchestrated by Elon Musk, aims to bridge the gap with competitors in the AI coding tools sector. The acquisition is contingent upon SpaceX's planned initial public offering, which targets a $2 trillion valuation, with a $10 billion breakup fee serving as a safeguard. The investment in Cursor was initially made by Alameda Research, a trading firm founded by Sam Bankman-Fried, for $200,000 in April 2022, representing a 5% stake at a $4 million valuation.
However, after FTX's collapse, the court-appointed estate sold the stake for the same $200,000, resulting in a missed opportunity of roughly 15,000x return. This significant loss has sparked controversy, particularly given Bankman-Fried's arguments that the estate's rapid liquidation of assets destroyed billions in value, and that customers could have been made whole if the process had been handled differently. The Cursor stake's valuation surge is a prime example of the potential value that could have been realized, with FTX customers now facing a forgone recovery of approximately $3 billion.
This development is likely to feature prominently in Bankman-Fried's ongoing campaign, as well as his family's public advocacy for a pardon, as they argue that the case against him should be revisited in light of the significant losses incurred by the estate's handling of assets.