In a striking example of a missed recovery, 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 recent agreement to acquire the company at a $60 billion valuation. This deal, which is part of Elon Musk's strategy to enhance SpaceX's AI capabilities, particularly in AI coding tools, has brought attention to the significant gap between the original sale price and the current valuation. The stake was originally acquired by Alameda Research, a trading firm founded by Sam Bankman-Fried, for $200,000 in April 2022, representing about 5% of the company at a $4 million valuation.
After FTX's collapse, the court-appointed estate sold the stake for the same $200,000, resulting in a substantial loss of potential recovery for the estate's creditors. This event has sparked debate, especially given Bankman-Fried's arguments that the estate's rapid liquidation of assets, including the Cursor stake, destroyed billions in value that could have been recovered if the assets had been held longer. The significant increase in Cursor's valuation since its AI coding product launch in 2023 underscores the potential value that could have been realized.
While FTX customers have been repaid in full under the bankruptcy distribution plan, the substantial upside from assets like the Cursor stake, which could have contributed to a more significant recovery, was not realized. This instance is likely to feature in ongoing discussions about the handling of FTX's assets during the bankruptcy process.