In a surprising 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 valued at approximately $3 billion following SpaceX's recent agreement to acquire the company at a $60 billion valuation. This development has brought attention to the significant gap between the initial sale price and the current worth of the stake, with the latter representing a substantial 15,000x return.
The deal is part of Elon Musk's efforts to enhance SpaceX's AI coding capabilities, particularly in competition with OpenAI and Anthropic. The acquisition is contingent upon SpaceX's planned initial public offering, which aims to achieve a $2 trillion valuation. The crypto community is abuzz with the news, given the stake's origins in Alameda Research's $200,000 investment in Anysphere, the company behind Cursor, in April 2022.
The investment, which bought roughly 5% of the company at a $4 million valuation, was later sold by the FTX estate for the same amount after the company's collapse. This has sparked debate about the timing and value of the sale, with some arguing that the estate could have realized significantly more value for its creditors if it had held onto the stake. The issue is particularly sensitive given the current situation of FTX's founder, Sam Bankman-Fried, who is serving a 25-year federal sentence and has been advocating for a reevaluation of the estate's asset liquidation strategy during the bankruptcy process.
Bankman-Fried has suggested that the estate's decision to sell assets quickly destroyed billions of dollars in potential value, which could have been realized if the assets had been held longer. The Cursor stake's remarkable growth, from its launch in early 2023 to its current valuation, is among the most impressive in software startup history, and its sale has become a prime example of the potential value that could have been captured by the estate.
While FTX customers have been reimbursed in full, plus interest, under the bankruptcy distribution plan, they did not benefit from the significant upside of the assets sold during the bankruptcy proceedings, including the substantial increase in value of the Cursor stake.