The value of a 5% stake in AI coding startup Cursor, sold by FTX's bankruptcy estate for $200,000 in April 2023, has skyrocketed to approximately $3 billion following SpaceX's recent agreement to acquire the company at a $60 billion valuation. This significant increase in value has brought attention to the deal, particularly as it relates to the crypto industry and the estate's handling of FTX's assets.
Elon Musk's SpaceX has the option to acquire Cursor later this year for $60 billion or pay $10 billion if the full acquisition does not proceed, with the goal of closing the gap with competitors in AI coding tools. The transaction is tied to SpaceX's planned initial public offering, which targets a $2 trillion valuation. The investment in Cursor was initially made by Alameda Research, a trading firm founded by Sam Bankman-Fried, in April 2022 for $200,000, representing roughly 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 missed opportunity for creditors.
This event has sparked debate, especially given Bankman-Fried's arguments that the estate's liquidation of assets too quickly during the bankruptcy destroyed 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 deal has also raised questions about the estate's handling of assets, with the Cursor stake's value increasing by approximately 15,000% since its sale. While FTX customers have been repaid in dollar terms under the bankruptcy's distribution plan, they did not receive the upside from the assets' increased value, including the $3 billion forgone recovery from the Cursor stake.