Why Figure is tipped for 56% stock spike amid second IPO

Figure, a $7.4 billion blockchain lender, is being tipped for a significant stock price increase despite a 22% decline over the last month.

On Friday, Bernstein analysts predicted that Figure’s stock price would rise 56% to $54 by the end of next year. The call comes on the heels of Figure’s last quarter performance, which saw the lender’s net revenue climb 42% to $156 million compared to the same period the previous year.

Figure’s co-founder and executive chairman, Mike Cagney, said the company was “killing it,” while dissecting last quarter’s financials.

And Bernstein’s tip seems to echo such sentiments even as its analysts say Figure is the “leading tokenisation platform for credit.”

Still, the optimism collides with a critical inflexion point for Figure as the blockchain lender prepares for a second public offering. The company raised approximately $800 million in an initial public offering in the US in September.

On Thursday, Figure announced that it had applied to the Securities and Exchange Commission for approval to sell a tokenised version of its stock. If approved, investors will be able to purchase crypto tokens that represent shares of Figure’s Class A Common Stock.

The tokenised stocks won’t be traded on a legacy exchange but on Figure’s own trading platform, according to the announcement. Cagney said the second IPO will be non-dilutive to shareholders since it’s an entirely secondary sale.

Investors who participate in the second IPO will receive their tokens on Provenance, a $1.5 billion blockchain.

However, bullishness for Figure comes with an asterisk.

In October, Heloc, a cryptocurrency that represents Figure’s home equity loans, slumped 81% in a flash crash that sent $13 billion worth of loans into a tailspin.

The token has since recovered to trade almost at par with Figure’s YLDS dollar stablecoin.

The incident highlighted concerns over the opacity of Figure’s blockchain lending business.

Osato Avan-Nomayo is our Nigeria-based DeFi correspondent. He covers DeFi and tech. Got a tip? Please contact him at osato@dlnews.com.