In a stunning turn of events, FTX's bankruptcy estate sold a 5% stake in AI coding startup Cursor for $200,000 in April 2023, a stake that would now be valued at approximately $3 billion following SpaceX's acquisition agreement at a $60 billion valuation. This massive disparity has brought attention to the significant losses incurred by FTX's estate during its bankruptcy proceedings. The acquisition is part of Elon Musk's strategy to enhance SpaceX's AI capabilities, particularly in the realm of coding tools, where the company currently lags behind competitors like OpenAI and Anthropic.
The deal allows SpaceX to either purchase Cursor for $60 billion later this year or pay $10 billion if the full acquisition does not proceed, with the latter serving as a breakup fee as SpaceX prepares for its initial public offering, targeting a $2 trillion valuation. The crypto community is abuzz with the news, given the significant investment Alameda Research, founded by Sam Bankman-Fried, made in Anysphere, the company behind Cursor, in April 2022. This investment of $200,000 bought roughly 5% of the company at a $4 million valuation.
However, following FTX's collapse and subsequent bankruptcy, the court-appointed estate sold the Cursor stake for the same $200,000, realizing a significantly lower return than its current worth. This gap represents a 15,000x return, which was instead realized by the buyer from the bankruptcy rather than FTX's creditors.
The timing of this revelation is particularly awkward for FTX's bankruptcy administration, as it comes amidst arguments from Sam Bankman-Fried that the estate's liquidation of assets was too hasty, resulting in the destruction of billions in value. Bankman-Fried has suggested that if the estate had held onto these assets, FTX's net asset value could have reached $78 billion, and customers could have received more than their initial investments.
While FTX customers have been repaid in full, the missed opportunity represented by the Cursor stake, now valued at $3 billion, underscores the potential upside that was not realized. This significant disparity is likely to feature prominently in ongoing discussions about the handling of FTX's assets during its bankruptcy and may influence future decisions regarding the company's estate.