In recent developments, Figure AI, a prominent robotics startup, has initiated legal measures against certain secondary market brokers. These brokers had been marketing the company’s private stock without authorization, prompting Figure AI to issue cease-and-desist letters to at least two such entities.
Background on Figure AI’s Valuation and Market Interest
Founded by Brett Adcock, Figure AI has garnered significant attention in the tech industry. In February 2024, the company achieved a valuation of $2.6 billion. By mid-February 2025, reports emerged indicating that Figure AI was seeking a $1.5 billion funding round, aiming for a valuation of $39.5 billion—a fifteenfold increase from the previous year. This substantial growth has made Figure AI’s stock highly sought after in secondary markets.
Cease-and-Desist Actions
Following the heightened interest in its stock, Figure AI discovered that certain brokers were marketing its shares without the company’s consent. In response, the company issued cease-and-desist letters to these brokers, demanding an immediate halt to the unauthorized promotion and sale of its stock. A spokesperson for Figure AI stated, We do not allow secondary market trading in our shares without board authorization and the company will continue to protect itself against unwanted third-party brokers in the market.
Understanding Secondary Markets and Private Company Shares
Secondary markets provide platforms for investors to buy and sell shares of private companies. Unlike public companies, whose stocks are traded openly on stock exchanges, private company shares are not as easily transferable. This limitation often leads to the emergence of secondary markets, where investors seek liquidity for their holdings ahead of potential public offerings.
Potential Implications of Unauthorized Stock Marketing
The unauthorized marketing of Figure AI’s stock by secondary brokers poses several challenges:
1. Valuation Concerns: If existing shareholders attempt to sell their shares at prices below the company’s targeted valuation, it could undermine the perceived value of the company. This discrepancy might deter potential investors from participating in upcoming funding rounds.
2. Market Perception: Unauthorized sales can create confusion and misrepresentation in the market. Prospective investors might question the company’s control over its stock and the accuracy of its reported valuations.
3. Regulatory Compliance: Unauthorized trading activities can lead to regulatory scrutiny. Companies are obligated to ensure that their shares are marketed and sold in compliance with securities laws. Unauthorized promotions can result in legal complications and potential penalties.
Industry Perspectives on Secondary Market Activities
Sim Desai, founder and CEO of the secondary shares marketplace Hiive, provided insights into the dynamics between companies and secondary markets. He noted that some companies view secondary sales as a zero-sum game, fearing that such activities might compete with their primary funding efforts. However, Desai argued that active secondary market trading could, in fact, attract more interest in primary shares during new funding rounds. He emphasized that challenges in selling shares are often a reflection of pricing and valuation issues rather than a lack of available capital.
Broader Context: Regulatory Actions in the Tech Industry
Figure AI’s actions are part of a broader trend where tech companies are taking steps to control the distribution and marketing of their shares. Unauthorized trading and misrepresentation can have significant implications for a company’s valuation, investor relations, and regulatory standing.
Conclusion
Figure AI’s proactive measures against unauthorized secondary market brokers underscore the company’s commitment to maintaining control over its stock and ensuring that all trading activities align with its strategic objectives and regulatory requirements. As the tech industry continues to evolve, companies are increasingly vigilant in protecting their interests and ensuring that their valuations accurately reflect their market position and potential.
