Brett Adcock’s recent assertion that Figure AI had become the most in-demand private stock in the secondary market caught the attention of the startup world. However, the robotics firm took swift action and instructed at least two secondary market brokers to immediately halt any marketing or trading of its private shares.
According to representatives from those secondary marketplaces, Figure AI’s cease and desist letters arrived on the heels of news reports in February detailing the company’s pursuit of a multibillion dollar funding round that would vault its valuation to nearly $40 billion, a massive leap from earlier in the year. The company’s official stance is that any trading or marketing of its shares must have explicit board approval, and it is willing to send legal notices to any third parties violating that rule.
Secondary Markets Under Scrutiny
Because Figure remains a privately held entity, existing investors face restrictions on trading their shares unless the company authorizes a transaction. The development of secondary markets has emerged in response, offering avenues for shareholders to access liquidity, including loans backed by their startup equity that pay out when firms go public.
Brokers receiving the legal threats believe some technology founders resist secondary share trading for other reasons. According to them, attempts to sell Figure stock at prices below the company’s ambitious new valuation are perceived as a risk that could undercut primary fundraising efforts.
The notion is that cheaper stock sold on the secondary market could dampen excitement for new rounds at higher valuations. One industry executive points out that while companies sometimes see this as a conflict, an active secondary market might actually boost interest among new investors.
If interest in the main funding round lags, the real question might center around whether the price is simply too high, not that capital is unavailable. Investors’ willingness to pay reflects their belief in the valuation, not the market’s access to funds.
Alongside these financial developments, Figure AI remains in the headlines due to reports covering its growing partnerships, including recent coverage of its relationship with BMW. The company has denied the accuracy of at least one such article and even threatened legal action over what it calls significant inaccuracies.
Questions remain about the robotics firm’s next funding move and whether current shareholders will get a chance to sell stock ahead of a future public offering. The path forward for secondary stock trading is still unfolding.
