Last month, Brett Adcock, founder of robotics startup Figure AI, declared publicly on social media that his company had become the most sought-after private stock on secondary market platforms. Now, brokers from two separate marketplaces have revealed they recently received cease-and-desist letters from Figure AI, ordering them to immediately halt marketing shares of the company.
These letters from Figure AI to secondary brokers came shortly after Bloomberg reported in February that Figure AI was aiming to raise $1.5 billion at a valuation near $39.5 billion—roughly a 15-fold increase from the $2.6 billion valuation it secured the previous year.
A representative for Figure AI confirmed the company sends such notices regularly whenever it uncovers brokers selling its shares without authorization from the board of directors. “Upon discovering an unauthorized third party marketing Figure shares this year without board approval, the company issued a cease-and-desist letter, as we have consistently done in the past,” the spokesperson said in a statement. “We prohibit secondary market transactions of our shares unless explicitly sanctioned by the board. The company remains committed to protecting itself against unauthorized brokers.”
Figure AI remains privately held, meaning its shares are not freely tradable on open markets. As a result, secondary markets have emerged to aid shareholders looking for liquidity in advance of a public offering or other company event. These secondary marketplaces sometimes offer shareholders methods of realizing value from their holdings earlier, including loans secured by their private stock.
According to the two brokers targeted by Figure AI’s cease-and-desist letters, such actions may reflect tensions around valuation. Shareholders of Figure AI were reportedly offering their holdings at prices below the proposed new valuation, potentially competing with or undermining that figure.
“Without commenting specifically on Figure AI, it’s common for some companies to see secondary sales as a threat. CEOs may perceive them as a zero-sum game,” Sim Desai, founder and CEO of secondary market platform Hiive, explained. However, according to Desai, active secondary trading can positively influence primary funding rounds by generating increased interest and market momentum. Struggling to sell shares on the secondary market is typically “more about misalignment of valuation than a shortage of available capital,” Desai added.
In recent weeks, Figure AI also faced scrutiny related to media coverage of its flagship partnership with automobile giant BMW. Figure AI had threatened legal action over what it described as significant factual inaccuracies in certain reports.
Meanwhile, the specifics of Figure AI’s latest fundraising effort—both the final amount and the valuation—remain uncertain. It is also unclear whether the company’s shareholders will successfully use secondary platforms for early liquidity at valuations satisfactory to both existing investors and potential new investors.
