SpaceX has confidentially filed for an IPO that could value the Elon Musk-owned company at $1.75 trillion and make him the world's first trillionaire. Other investors in the company could also be in for big days, although one person missing out on profits from the IPO is incarcerated cryptocurrency entrepreneur Sam Bankman-Fried.

FTX Stake in SpaceX

Cryptocurrency trading platform FTX was once valued at $26 billion in March 2022, with Bankman-Fried, its co-founder and former CEO, once worth $26 billion.

The company later declared bankruptcy and Bankman-Fried was sentenced to 25 years in prison for fraud and misappropriation of customer funds, with some customer deposits being used towards other investments.

Among those investments were FTX's Alameda Research investment firm buying Solana (CRYPTO: SOL) and other cryptocurrencies and also taking stakes in companies like Anthropic, Robinhood Markets (NASDAQ:HOOD) and K5 Global, which had investments in SpaceX, Anduril, The Boring Company and other private companies.

Alameda Research invested $700 million alongside K5 Global in 2022, according to a report from Forbes. K5 Global owned stakes in several private companies, including the stakes in Musk-related companies SpaceX and The Boring Company.

During FTX's bankruptcy proceedings, the cryptocurrency company fought to maintain its stake in the K5 funds, reaching a settlement to keep the position.

FTX's original $700 million investment was worth an estimated $3 billion by Forbes earlier this year.

It is unknown exactly what percent of the $700 million was put into SpaceX and if K5 still maintains the stakes in all the private companies it invested in. The Financial Times previously estimated that FTX had around $225 million invested in The Boring Company and SpaceX from its $700 million investment.

SpaceX was valued at $140 billion in December 2022. Based on that valuation and the new $1.75 trillion IPO valuation, a $225 million stake would be worth $2.81 billion now, while a $112.5 million stake (splitting $225 million between SpaceX and The Boring Company) would be worth $1.41 billion.

This represents a 12.5x return on investment from the original stake taken by FTX and Bankman-Fried.

Early Stakes Cashed Out Too Soon?

While it is assumed that FTX still holds some stake in K5, the company sold off other investments made under Bankman-Fried's leadership.

This includes a stake in Anthropic taken back in 2021. The $500 million investment was for around 8% of the company at the time. Based on a recent $380 billion valuation for the company, the stake would have been worth $28.8 billion, as reported by Forbes.

Instead, FTX sold the stake in 2024 as part of the bankruptcy proceedings, generating $1.3 billion for a profit of 160%. While the sale generated a profit for investors, keeping the stake would have generated higher returns in the future.

Bankman-Fried is well aware of the early stake he took in Anthropic and how much it would be worth today. The former FTX CEO recently replied "Ahem" to a user on social media who said that investing in Anthropic would have been by far one of the best investments someone could have made years ago. Bankman-Fried shared Forbes’ table of valuations for former FTX investments in his tweet.

Alameda Capital also formerly owned a stake in Robinhood, representing around 7.6% of the company. That stake later became seized by the Department of Justice. The stake today would be worth around $4.67 billion versus the $648 million investment price in 2022.

Forbes estimated earlier this year that the positions previously owned by FTX/Alameda Capital would be worth $52.5 billion, or more than three times what they were sold/liquidated for as a result of the bankruptcy process.

While investments made by Bankman-Fried have soared in value, they don't take away from the fact that he committed crimes and illegally used customer funds.

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