From $200k turning into $3 billion! FTX “sold Cursor equity off for peanuts,” and now Musk is showering big money to buy it

Cursor, acquired by SpaceX—owned by Elon Musk—at a $60 billion valuation, agreed to purchase, causing the value of this 5% equity stake to skyrocket to $3 billion. However, the FTX liquidation team had already sold it at the original price, missing out on a 15,000-fold return.

Recently, the bankrupt cryptocurrency exchange FTX has again become a hot topic in the market. The reason is not the progress of creditor compensation, but that the FTX bankruptcy liquidation team sold, only for $200,000, the equity in the AI startup Cursor several years ago; now its value has surged to about $3 billion, with potential returns as high as 15,000 times.

Earlier this week, SpaceX led by the world’s richest person, Elon Musk, threw a bombshell into the market, announcing it has obtained the right to acquire the AI startup Cursor for $60 billion. If the acquisition ultimately cannot be completed, then a $10 billion payment will be made to promote cooperation between the two sides.

This astonishing deal not only shocked global markets, but also unexpectedly pulled out an “offshoot case.” Looking back to April 2022, Alameda Research—FTX’s sister company founded by Sam Bankman-Fried (SBF)—invested $200,000 into Cursor’s parent company, Anysphere, obtaining about 5% of the shares at a valuation of $4 million.

But just one year later, Alameda Research and FTX both filed for bankruptcy protection. To quickly raise cash, the bankruptcy liquidation team appointed by the court ended up disposing of this Cursor equity stake at the original purchase price of $200,000.

If we estimate using SpaceX’s $60 billion valuation, the value of this 5% equity stake is now as high as $3 billion—missing out on a potential return of up to 15,000 times. What could have been windfall to maximize creditor compensation ultimately ended up in the pocket of a mysterious buyer who bought it cheaply back then during the bankruptcy proceedings.

This transaction undoubtedly provides SBF, who is currently serving a prison sentence, with the strongest ammunition for his defense. Over the past year, SBF has repeatedly spoken from prison, sharply criticizing the bankruptcy liquidation team for pursuing a quick settlement by selling assets at any cost during a market downturn, severely harming customers’ interests.

In February this year, SBF submitted an asset valuation, claiming that if the liquidation team could “continue holding” these shares and cryptocurrencies, and weather the downturns of 2023 and 2024, then FTX’s net asset value (NAV) should now be able to reach $78 billion.

• This article has been republished with permission from: 《Block Beast》
• Original title: “From $200,000 to $3 Billion! FTX’s Fire-Sale of ‘Cursor Equity’ Missed Out on a 15,000-Fold Return”
• Original author: Block Sister MEL