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 agreement to acquire the company at a $60 billion valuation. This staggering increase has brought attention to the significant missed recovery in crypto history.
SpaceX's decision to acquire Cursor is part of Elon Musk's strategy to close the gap with competitors in the AI coding tools space. The deal has been structured to allow SpaceX to either buy Cursor for $60 billion later this year or pay $10 billion if the full 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 crypto connection lies in Alameda Research's $200,000 investment in Anysphere, the company behind Cursor, in April 2022, which translated to a roughly 5% stake at a $4 million valuation. After FTX's collapse, the court-appointed estate sold the Cursor stake for the same $200,000, resulting in a missed opportunity for creditors.
This incident has reignited the debate over FTX's bankruptcy administration, with Sam Bankman-Fried arguing that the estate's liquidation of assets too quickly destroyed billions in value. The timing of the SpaceX-Cursor deal has awkward implications for FTX's estate, as it underscores the potential value that could have been realized if assets had been held instead of sold. The FTX customers have been reimbursed in full, but they missed out on the substantial upside from the assets' increased value between the bankruptcy filing and the present day. This example is likely to be cited by Bankman-Fried and his family as they continue to advocate for a pardon, highlighting the kind of value they claim the estate destroyed through forced selling.