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 a staggering $3 billion following SpaceX's acquisition of the company at a $60 billion valuation. This development has brought to light a substantial missed recovery in crypto history.
SpaceX's agreement to acquire Cursor is part of Elon Musk's strategy to bridge the gap with competitors in the AI coding tools sector. The deal is contingent on SpaceX's planned initial public offering, which aims to achieve a $2 trillion valuation.
The crypto aspect of this story lies in Alameda Research's initial investment of $200,000 in Anysphere, the company behind Cursor, in April 2022. This investment, which represented a 5% stake in 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 significant disparity between the sold price and the current valuation of $3 billion translates to a 15,000x return, which would have been realized by the creditors if the estate had held onto the stake. This situation has sparked controversy, particularly given Sam Bankman-Fried's arguments that the FTX estate's liquidation of assets too quickly during the bankruptcy destroyed billions in value.
The timing of this revelation is particularly awkward for the FTX bankruptcy administration, as it underscores the potential consequences of rapid asset liquidation. The FTX customers, although made whole in terms of their claim values and interest, did not benefit from the substantial upside of the assets sold during the bankruptcy process. This example is likely to be cited in the ongoing campaign for Bankman-Fried's pardon, as it illustrates the kind of value that could have been preserved if the estate had adopted a different approach to asset management.