📝 usncan Note: Figure Stock Surges In Nasdaq Debut After $787 Million IPO
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Figure executives, including cofounders Mike Cagney and June Ou, and CEO Michael Tannenbaum, at the Nasdaq opening bell ceremony on Thursday morning.
Nasdaq
Home equity lender Figure Technology Solutions began trading on the Nasdaq stock exchange on Thursday, becoming the latest crypto and blockchain firm to launch into public markets. It opened at nearly $36 per share, more than 40% above its IPO price, before settling back to around $32.
Figure’s Wall Street debut comes after the New York City based company upsized its initial public offering twice, amid a surge in investor demand for crypto stocks. The fintech settled on a price of $25 per share late on Wednesday, above its targeted range of $20 to $22 per share, after increasing its offering from 26 million shares to 31.5 million on Tuesday. Under the new deal, Figure raised $787 million, bringing its total valuation at the offering to more than $5 billion.
Figure’s public debut follows other successful fintech and crypto IPOs this summer, including Klarna, a buy-now, pay-later company which went public on Wednesday and closed its first day of trading up 15%, after also raising its IPO price at the last minute. Stablecoin issuer Circle went public in June at $31, more than doubled in its first day, and is now trading at $131. The Winklevoss twins’ crypto exchange, Gemini, is scheduled to make its public debut tomorrow.
Figure was cofounded in 2018 by SoFi cofounder and former CEO Mike Cagney, and offers a blockchain platform designed to originate, fund, track and trade loans. The company launched home equity lines of credit (HELOCs) as its first product and so far has originated more than $16 billion in loans and facilitated over $50 billion transactions on its blockchain, according to its S-1 filing with the Securities and Exchange Commission earlier this month. While traditional banks take an average of 42 days to fund a HELOC, Figure typically takes just 10 days, it said in its IPO prospectus.
As a part of its vision to bring all capital markets onto the blockchain, Figure plans to use the technology to venture into other asset classes, such as auto and small business loans. “You can think about the kind of future of capital markets all coming on blockchain and the HELOC is just one reference point,” CEO Michael Tannenbaum told Forbes.
The company also operates a digital asset exchange, issues its own interest-bearing stablecoin, and offers crypto-backed loans using bitcoin and ethereum as collateral – a newer product for Figure that has seen rapid growth, says Tannenbaum.
Tannenbaum told Forbes that Figure “uses blockchain to solve the problems of technology and capital markets not talking to each other.” The company’s native blockchain, Provenance, can log the attributes of a loan onto its public ledger, removing the need for verification by a third party due diligence firm. Moreover, Figure’s electronic lien registry relies on blockchain technology to automatically update loan ownership and registration information.
The company reported net earnings of $29 million on revenue of $191 million for the first half of the year ending June 30, compared with a net loss of $13 million and revenue of $156 million in the same period the year before.
DCM Ventures, a venture capital firm headquartered in Silicon Valley, was an early investor in Figure in 2017. “What’s most exciting is that now the market is ready to use blockchains for financial transactions […] the large bank institutions are ready,” said general partner and cofounder David Chao in response to Figure’s first day of trading.
Goldman Sachs, Jefferies and BofA Securities led the initial public offering. The blockchain lender trades under the symbol FIGR.
