In a striking 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 worth approximately $3 billion, following SpaceX's agreement to acquire the company at a valuation of $60 billion. This development comes as SpaceX, led by Elon Musk, seeks to expand its presence in AI coding tools, an area where the company currently lags behind competitors like OpenAI and Anthropic. The acquisition deal, which includes a $10 billion breakup fee, is contingent upon SpaceX's planned initial public offering, targeting a $2 trillion valuation.
The cryptocurrency aspect of this story revolves around Alameda Research, founded by Sam Bankman-Fried, which invested $200,000 in Anysphere, the company behind Cursor, in April 2022. This investment, which bought roughly 5% of the company at a $4 million valuation, was sold by the FTX estate for the same amount a year later, following the collapse of FTX and Alameda.
The resulting gap between the sale price and the current valuation represents a staggering 15,000x return, which was realized by the buyer rather than the creditors. This outcome has significant implications for FTX's bankruptcy administration, particularly in light of Bankman-Fried's arguments that the estate's rapid liquidation of assets destroyed billions of dollars in value. The timing of the SpaceX acquisition deal is awkward for the FTX estate, as it underscores the potential value that could have been realized if the assets had been held rather than sold.
The FTX customers, who have been repaid in full under the bankruptcy distribution plan, did not benefit from the upside of the assets sold during the bankruptcy process, including the Cursor stake, which now represents a forgone recovery of approximately $3 billion.