Figure AI Cracks Down on Unauthorized Secondary Stock Trading
Robotics startup Figure AI has issued cease-and-desist letters to at least two brokers operating in the secondary market. These brokers were reportedly marketing Figure AI shares without authorization.
Figure AI founder Brett Adcock previously stated on X that the company's private stock was highly sought after. However, following a Bloomberg report about Figure AI seeking a new funding round at a $39.5 billion valuation, the company took action against unauthorized brokers.
A Figure AI spokesperson confirmed the action, stating the company routinely sends such letters when brokers sell shares without board approval. The spokesperson emphasized that Figure AI does not permit secondary market trading without authorization and will continue to protect itself against unauthorized brokers.
Why the Crackdown?
As a private company, Figure AI's stock isn't readily tradable like publicly listed companies. Secondary markets offer investors alternative ways to liquidate their holdings before an IPO, often through loans secured by shares.
Brokers suggest that Figure AI's actions may stem from concerns about shares being sold below the targeted $39.5 billion valuation. They believe some companies resist lower-priced secondary shares competing with new funding rounds.
Sim Desai, CEO of secondary marketplace Hiive, commented on the broader issue, suggesting some companies view secondary trading as a zero-sum game. He argues that active secondary trading can actually stimulate interest in primary shares during a new raise.
Desai further suggests that difficulties selling shares are often related to price and valuation, not capital availability.
Beyond the Secondary Market
Figure AI has also been the subject of recent news articles regarding its partnership with BMW. The company has reportedly threatened legal action against at least one publication, citing inaccuracies.
The final valuation and amount Figure AI raises in its next funding round remain uncertain. The future of secondary transactions for existing investors is also yet to be determined.
