FTX estate misses out on $3B Cursor stake value after $200K sale in 2023

The FTX bankruptcy estate sold a 5% stake in AI coding startup Cursor for $200,000 in April 2023, missing out on roughly $3 billion after the company was valued at $60 billion in a SpaceX-linked deal this week.

On Wednesday, SpaceX said it has secured the right to acquire Cursor later this year at a $60 billion valuation, or alternatively pay a $10 billion breakup fee if the transaction does not proceed.

That valuation sharply revalues FTX’s earlier position in the company, which traces back to April 2022 when Alameda Research, a quantitative trading firm also founded by Sam Bankman-Fried, invested $200,000 in Anysphere, the startup behind Cursor. The investment reportedly secured about a 5% equity stake at a $4 million valuation.

One year later, FTX had collapsed, Alameda was in bankruptcy, and the court-appointed estate moved to liquidate assets. Among those sales was the Cursor stake, which was sold for the same $200,000 originally invested. At today’s implied valuation, that same stake would be worth around $3 billion.

Related: Sam Bankman-Fried pulls motion for a new trial, still asks for new judge

FTX estate faces scrutiny over early asset sales

The missed upside adds to ongoing scrutiny of how the FTX estate handled asset sales during bankruptcy proceedings. Bankman-Fried, who is currently serving a 25-year federal sentence, has repeatedly argued that the estate destroyed significant value by liquidating positions too early and at depressed prices.

“FTX was never bankrupt. I never filed for it,” Bankman-Fried wrote on X earlier this year. “The lawyers took over the company and 4 hours later, they filed a bogus bankruptcy so they could pilfer it for money,” he added.

FTX creditors have since been repaid in dollar terms under the restructuring plan, receiving their claim values plus interest.

Bankman-Fried was convicted on multiple federal charges including fraud and conspiracy after prosecutors argued he orchestrated one of the largest financial frauds in US history. He was found guilty of misappropriating billions of dollars in customer funds from FTX by funneling them to Alameda Research, making risky investments, political donations and personal expenditures.

Related: Former FTX head of engineering fined $3.7M to resolve CFTC lawsuit

FTX missed $114 billion in potential value

An analysis from financial research platform Bull Theory estimates that key positions sold early by the FTX estate could now be worth about $114 billion if they had been held through recent market cycles.

AI startup Anthropic tops the list, where an 8% stake purchased for $500 million would now be worth over $80 billion following a 165x increase. Moreover, SpaceX is estimated to account for a $15 billion valuation impact from early liquidations, alongside Solana at $5.1 billion after a reported 27x move, Robinhood at $4.9 billion and Genesis Digital at $3.5 billion.

“SBF was a genius at picking generational winners and a criminal at managing their money,” Bull Theory wrote on X, noting the estate ultimately recovered about $18 billion for users despite leaving significant upside on the table.

Magazine: How to fix suspected insider trading on Polymarket and Kalshi