A 5% stake in Cursor, sold by FTX's bankruptcy estate for $200,000 in 2023, would now be valued at approximately $3 billion following SpaceX's acquisition agreement. This development has brought attention to the significant potential value that could have been realized by FTX's creditors, had the stake not been sold at a substantially lower price.
The acquisition is part of Elon Musk's strategy to enhance SpaceX's position in AI coding tools, an area where the company currently lags behind competitors. The deal's structure, which includes a potential $10 billion payment if the full acquisition does not proceed, is tied to SpaceX's planned initial public offering, targeting a $2 trillion valuation. The sale of the Cursor stake by FTX's estate has been cited by Sam Bankman-Fried as an example of the estate's alleged destruction of billions of dollars in value through the rapid liquidation of assets during the bankruptcy process. Bankman-Fried has argued that holding onto these assets could have resulted in significantly higher recoveries for creditors.
The trajectory of Cursor's valuation, from $4 million at the time of Alameda's investment to $60 billion, is among the most remarkable in software startup history. While FTX customers have been reimbursed in full, the substantial upside from assets like the Cursor stake has not been realized, with the difference between the sale price and current valuation representing a 15,000% return. This example is expected to feature prominently in discussions about the handling of FTX's assets during the bankruptcy process.