The bankruptcy estate of FTX sold a 5% stake in AI coding startup Cursor for $200,000 in April 2023, a stake that would now be valued at approximately $3 billion following SpaceX's agreement to acquire the company at a $60 billion valuation. This development has brought attention to the significant losses incurred by FTX's creditors due to the estate's decision to liquidate assets during the bankruptcy process. Elon Musk's SpaceX has agreed to acquire Cursor, with the option to buy the company outright for $60 billion or pay a $10 billion breakup fee if the acquisition does not proceed. The deal is part of Musk's efforts to enhance SpaceX's AI capabilities, particularly in the area of AI coding tools, where the company currently lags behind competitors.
The acquisition is contingent upon SpaceX's planned initial public offering, which is expected to value the company at $2 trillion. 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 in Anysphere, the company behind Cursor.
This investment represented a 5% stake in the company, which was valued at $4 million at the time. However, following FTX's collapse and subsequent bankruptcy, the court-appointed estate sold the stake for the same $200,000, resulting in a significant missed opportunity for the estate's creditors.
The sale of the stake has been cited by Bankman-Fried as an example of the estate's failure to maximize recoveries for creditors, with the former FTX CEO arguing that the estate's decision to liquidate assets too quickly destroyed billions of dollars in value. The timing of the sale has also been questioned, given the subsequent recovery in crypto prices and the significant increase in Cursor's valuation.
The case has sparked debate about the management of FTX's bankruptcy estate and the treatment of creditors, with some arguing that the estate's decisions have resulted in significant losses for those affected by the company's collapse.