In a surprising 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 acquisition agreement at a $60 billion valuation. This development comes as SpaceX, led by Elon Musk, aims to bridge the gap with competitors in the AI coding tools space.
The company has opted to delay the acquisition due to its upcoming initial public offering, which targets a $2 trillion valuation, with a $10 billion breakup fee serving as a contingency plan. The investment in question originated from Alameda Research, founded by Sam Bankman-Fried, which invested $200,000 in Anysphere, the company behind Cursor, in April 2022.
This investment secured roughly 5% of the company at a $4 million valuation. However, after FTX's collapse, the court-appointed estate sold the stake for the same $200,000, resulting in a significant missed recovery opportunity. The gap between the realized value and the potential value today represents a substantial 15,000x return, which could have been realized by the creditors if the estate had held onto the assets.
This incident has sparked controversy, particularly given Bankman-Fried's arguments that the estate's rapid liquidation of assets destroyed billions in value, and that customers could have received more than their initial investments if the process had been handled differently. The timing of this revelation is particularly awkward for FTX's bankruptcy administration, as it underscores the potential consequences of forced selling. While FTX customers have been reimbursed in full, they have not benefited from the upside of the assets sold during the bankruptcy period, including the significant increase in value of the Cursor stake. This example is likely to feature prominently in ongoing discussions about the case against Bankman-Fried and the handling of FTX's estate.