Originally $200k could become $3 billion! FTX sold Cursor equity cheaply, now Musk is pouring in big money to buy it.

Cursor was acquired in a deal brokered by Elon Musk’s SpaceX at a valuation of $60 billion, causing the value of this 5% stake to soar to $3 billion. However, the FTX liquidation team had already sold it off at a bargain price from the original value, missing out on a potential 15,000x return.

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

Earlier this week, SpaceX, led by Elon Musk (the world’s richest person), dropped a market-shaking bombshell. SpaceX announced that it has obtained the right to acquire AI startup Cursor for $60 billion; if the acquisition ultimately cannot be completed, then it will pay $10 billion to drive cooperation between the two sides.

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

Yet just one year later, both Alameda Research and FTX filed for bankruptcy protection. In order to quickly raise cash, the bankruptcy liquidation team appointed by the court ended up selling off this Cursor equity at the original purchase price of $200,000.

If we estimate it based on the $60 billion price tag quoted by SpaceX, the value of this 5% stake is now as high as $3 billion—meaning the parties missed out on potential compensation of up to 15,000x. The “unexpected windfall,” which could have been used to maximize creditor recoveries, ultimately ended up in the pocket of a mysterious buyer who had snapped it up cheaply back when it was disposed of through the bankruptcy process.

This deal undoubtedly provides the strongest ammunition for SBF, who is currently serving time in prison. Over the past year, SBF has repeatedly spoken from behind bars, blasting the bankruptcy liquidation team for pursuing a fast close by dumping assets at any cost during the market downturn, severely damaging clients’ rights and interests.

In February this year, SBF submitted an asset valuation, claiming that if the liquidation team could “continue holding” these equity stakes 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 is republished with authorization from: “Block Beast”
• Original title: “From $200,000 to $3 billion! FTX’s cheap sale of ‘Cursor equity’ missed a 15,000x return”
• Original author: Block Sister MEL