TL;DR
- Bernstein analysts set a $54 price target for Figure, anticipating a 56% increase by the end of 2026.
- Figure has applied to the SEC for approval of a second tokenized IPO for its Class A shares.
- Optimism clashes with a recent ‘flash crash’ in its Heloc token, which raised concerns about the lender’s opacity.
Wall Street gave a significant boost to blockchain lender Figure, valued at $7.4 billion. This endorsement comes despite a volatile month, with its shares falling 22%. On Friday, Bernstein analysts issued a bullish forecast, predicting that Figure’s stock would soar 56% to reach $54 by the end of next year.
Wall Street’s confidence is based on robust results from the last three months, where the company achieved net revenues of over 42% year-over-year, totaling $156 million, a performance that co-founder Mike Cagney described by saying they were “killing it.”
Figure was rated by analysts as the “leading credit tokenization platform,” arriving at a critical inflection point. The company, which already raised $800 million in a traditional IPO in September, is now doubling down on blockchain technology. On Thursday, Figure announced that it formally applied to the Securities and Exchange Commission (SEC) for approval to launch an unprecedented secondary public offering.
Figure’s Second Tokenized IPO
Unlike its initial debut, this second tokenized IPO by Figure will not offer traditional shares, but rather tokenized versions of its Class A common stock. If the SEC gives the green light, investors will be able to purchase these tokens, which represent ownership of the shares.
Notably, these assets will not trade on traditional exchanges like the NYSE or Nasdaq, but will instead be traded directly on Figure’s own trading platform, utilizing the Provenance blockchain, valued at $1.5 billion.
Mike Cagney explained that this offering will be a purely secondary sale and, therefore, will not dilute existing shareholders. This model seeks to demonstrate the viability of large-scale real-world asset (RWA) tokenization, a sector that Figure aims to dominate.
However, this bullish optimism is not without risks, and investors should consider an “asterisk.” In October, Figure’s ecosystem suffered a major shock when Heloc, a token representing the company’s home equity loans, plunged 81% in a flash crash.
The incident, which put $13 billion worth of loans at risk, exposed serious concerns about the opacity of Figure’s blockchain lending business. Although the token has recovered since then, the SEC will undoubtedly evaluate this volatility when reviewing the application for Figure’s second tokenized IPO.
