In April 2023, FTX's bankruptcy estate sold a 5% stake in AI coding startup Cursor for $200,000, a fraction of its current worth of approximately $3 billion, following SpaceX's recent agreement to acquire the company at a $60 billion valuation. This deal has brought attention to the significant gap between the sale price and the current value, with the difference representing a substantial 15,000% return.
The investment was initially made by Alameda Research, a trading firm founded by Sam Bankman-Fried, in April 2022, with the company valued at $4 million at the time. After FTX's collapse, the court-appointed estate sold the stake for the same $200,000, with the buyer realizing the substantial increase in value rather than the creditors. This event has sparked debate, particularly given Sam Bankman-Fried's arguments that the estate's liquidation of assets too quickly during the bankruptcy led to the destruction of billions in value, and that customers could have been made whole if the process had held positions instead of selling them at the bottom of crypto prices. The timing of the SpaceX acquisition has also raised questions about the handling of FTX's assets during the bankruptcy, with Bankman-Fried's projection suggesting that the estate's net asset value could have reached $78 billion if assets had been held through the subsequent recovery.
The significant increase in Cursor's valuation, from $4 million to $60 billion in just three years, is among the steepest in software startup history, and the forgone recovery of approximately $3 billion from the stake has become a prominent example in the discussion about the estate's handling of assets.