In April 2023, FTX's bankruptcy estate sold a 5% stake in AI coding startup Cursor for $200,000, a fraction of its current worth. Following SpaceX's recent agreement to acquire Cursor at a $60 billion valuation, that same stake would now be valued at approximately $3 billion.
This staggering difference has brought attention to the significant losses incurred by FTX's estate during its bankruptcy proceedings. The deal marks a strategic move by Elon Musk to enhance SpaceX's AI capabilities, particularly in the area of AI coding tools. The acquisition is expected to take place later this year, with SpaceX having the option to pay $10 billion if the full acquisition does not proceed. Notably, the $10 billion payment will serve as a breakup fee, allowing SpaceX to delay the acquisition due to its planned initial public offering, which targets a $2 trillion valuation.
The investment in Cursor was initially made by Alameda Research in April 2022, with a $200,000 investment securing roughly 5% of the company at a $4 million valuation. After FTX's collapse, the court-appointed estate sold the stake for the same $200,000, resulting in a significant missed recovery opportunity. This oversight has sparked debate, particularly from Sam Bankman-Fried, who argues that the estate's decision to liquidate assets too quickly destroyed billions in value.
The sale of the Cursor stake has become a prime example of the potential value that could have been realized if the estate had held onto its assets. Despite FTX customers being repaid in full, the estate's handling of assets during the bankruptcy process remains a topic of discussion, with the Cursor stake's valuation serving as a notable example of the potential upside that was not realized.