The value of a 5% stake in AI coding startup Cursor, sold by FTX's bankruptcy estate for $200,000 in April 2023, has skyrocketed to approximately $3 billion following SpaceX's recent agreement to acquire the company at a $60 billion valuation. This deal, spearheaded by Elon Musk, aims to close the gap with competitors in the AI coding tools sector. The acquisition is contingent on SpaceX's planned initial public offering, which targets a $2 trillion valuation, with a $10 billion breakup fee if the full acquisition does not proceed. The investment in Cursor was initially made by Alameda Research, a trading firm founded by Sam Bankman-Fried, in April 2022, for $200,000, representing a 5% stake in the company at a $4 million valuation.
However, after FTX's collapse and subsequent bankruptcy, 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 Bankman-Fried, who argues that the estate's liquidation of assets too quickly during the bankruptcy destroyed billions in value, and that customers could have been made whole if the process had held positions instead of selling them into a downturn. The trajectory of Cursor's valuation, from its launch in early 2023 to its current valuation, is among the steepest in software startup history, with the stake now worth $3 billion, representing a 15,000x return on the initial investment.