The FTX platform's bankruptcy administration sold a 5% stake in AI-powered programming startup Cursor for just $200,000 in April 2023.
This same stake, after SpaceX's agreement to acquire Cursor for a valuation of up to $60 billion, is now worth approximately $3 billion. This represents a realized returns gap of 15,000 times that went to those who purchased the stake from the estate, rather than to the creditors whom the estate was originally intended to protect.
The crucial question here is whether liquidating distressed assets under bankruptcy restrictions can truly protect creditors' interests in high-speed technology markets, and what the answer means for every future estate forced to sell illiquid startup shares at falling market prices under pressure to convert to cash.