In a stunning 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 agreement to acquire the company at a $60 billion valuation. This development has brought to light a 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 is contingent on SpaceX's planned initial public offering, which is 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.
This investment, which bought roughly 5% of the company, was sold by the FTX estate for the same amount a year later, resulting in a missed opportunity for creditors. The timing of this sale has raised questions about the FTX bankruptcy administration's handling of assets. Sam Bankman-Fried, currently serving a 25-year federal sentence, has argued 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 has increased by approximately 15,000% since its sale, representing a significant forgone recovery for FTX customers.
While customers have been repaid in dollar terms, they have not benefited from the upside of the assets sold during the bankruptcy. This example is likely to feature prominently in Bankman-Fried's ongoing campaign for a pardon, as it highlights the kind of value he claims the estate destroyed through forced selling.