A 5% stake in AI coding startup Cursor that FTX's bankruptcy estate sold for $200,000 in April 2023 would be worth approximately $3 billion today, following SpaceX's agreement this week to acquire the company at a $60 billion valuation.

Market Context

SpaceX said Monday it has the right to acquire Cursor later this year for $60 billion or to pay a $10 billion breakup fee if the full acquisition does not proceed. The deal represents founder Elon Musk's effort to close the gap with OpenAI and Anthropic on AI coding tools, an area where he recently said xAI, the Musk-run AI company that merged with SpaceX, is behind competitors. The planned acquisition comes as SpaceX targets an initial public offering aiming for a $2 trillion valuation.

Analysis

The timing cuts awkwardly for FTX's bankruptcy administration. In April 2022, Alameda Research, the trading firm founded by Sam Bankman-Fried and run alongside FTX, invested $200,000 in Anysphere, the company that builds Cursor. That investment bought roughly 5% of the company at a $4 million valuation. One year later, FTX had collapsed, Alameda and FTX were in bankruptcy, and the court-appointed estate sold the Cursor stake for the same $200,000 Alameda had paid. The gap between what the FTX estate received and what the position would fetch today represents roughly a 15,000x return that was realized by whoever bought it from the bankruptcy rather than the creditors the estate was supposed to be maximizing recovery for.

Bankman-Fried, currently serving a 25-year federal sentence, has spent the past year arguing from prison that FTX's estate destroyed billions in value by liquidating assets too quickly during the bankruptcy, and that customers could have been made more than whole if the process had held positions instead of selling them into what turned out to be the bottom of crypto prices. In February, he shared a projection suggesting FTX's net asset value would have reached $78 billion if the estate had held assets through the subsequent recovery rather than selling in 2023 and 2024.

Cursor launched its AI coding product in early 2023, the same year the estate sold the stake, and the company's trajectory from that launch to its current valuation three years later is among the steepest in software startup history.

Key Numbers

- $200,000: Price FTX's bankruptcy estate received for its 5% Cursor stake in April 2023

- $3 billion: Current value of the stake at SpaceX's $60 billion acquisition price

- 15,000x: Multiple representing the return gap between sale price and current valuation

- $4 million: Valuation of Anysphere when Alameda invested in April 2022

- $60 billion: SpaceX's agreed purchase price for Cursor

- $10 billion: Breakup fee SpaceX will pay if acquisition does not proceed

- 25 years: Bankman-Fried's federal prison sentence

What to Watch

The Cursor number is likely to feature prominently in Bankman-Fried's continued campaign for a pardon, as it represents the single clearest example of value he claims the estate destroyed through forced selling. His parents have publicly advocated for a pardon, appearing on CNN in March arguing that FTX customers were ultimately repaid and that the case against their son should be revisited. SpaceX's acquisition is expected to close later this year, at which point the full extent of the missed recovery will be quantifiable against what creditors actually received.

FTX customers have since been made whole in dollar terms under the bankruptcy's distribution plan, receiving back their claim values plus interest. What they did not receive is the upside from what those assets became between the bankruptcy filing and now, which in the case of the Cursor stake alone represents about $3 billion of forgone recovery against $200,000 realized.