The recent announcement of SpaceX's plan to acquire AI coding startup Cursor at a valuation of $60 billion has shed light on a substantial missed recovery for FTX's estate. In April 2023, the estate sold its 5% stake in Cursor for $200,000, a stake that would now be worth approximately $3 billion.
This significant disparity has sparked debate about the handling of FTX's assets during its bankruptcy. SpaceX's acquisition deal, which includes the option to buy Cursor for $60 billion or pay a $10 billion breakup fee, is part of Elon Musk's efforts to enhance his company's AI coding capabilities.
The transaction has also brought attention to the investment made by Alameda Research, a trading firm founded by Sam Bankman-Fried, in Anysphere, the company behind Cursor. The investment, made in April 2022, purchased 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 substantial loss of potential recovery for creditors. This incident has been cited by Bankman-Fried, currently serving a 25-year federal sentence, as an example of the estate's alleged destruction of billions in value by liquidating assets too quickly.
The timing of the SpaceX deal has awkward implications for FTX's bankruptcy administration, particularly given Bankman-Fried's claims that the estate could have achieved a net asset value of $78 billion if it had held assets instead of selling them. While FTX customers have been repaid in full, they did not receive the upside from the assets' subsequent appreciation, including the significant increase in value of the Cursor stake.