Figure IPOs on NASDAQ, up 35%, as CFO Michael Tannenbaum unveils blockchain credit strategy

Legos around the studio. That was uh I was envious there. I mean, Tyler's over there just waiting to put them together. That's right. He just needs a time trial assembly line over here. Yeah. Uh well, without further ado, we have Michael from Figure from Figure coming in from the room. Michael, how you doing?

Good to meet you. Hi. How are you? We're great. We're great. How are you doing? Yeah, big day. Good day. Big day. Just another day at the office. Yeah. No, look, big day for Figure, big day for all the employees. Super proud of what we were able to accomplish. So, it's been awesome. Take us through the story.

What happened? So, today was our IPO. Um, fantastic. We You rang the bell. Didn't ring the bell. Yep. Rang the bell. So, actually, when you do that NASDAQ, when you do that NASDAQ, you don't ring the bell. You push the button to open the market. All digital. All digital. Digital.

But, you know, we're blockchain, so we like that. Yeah, it makes sense. And um yeah, no, so it's been uh it's been about a six-month process getting ready. You do a bunch of meetings, testing the waters as they call it now.

So from my understanding, IPOs have changed a bit uh since since COVID and now more virtual, more is done up front and there's actually a little bit less pressure on the road show itself, which was kind of a learning for me. But uh talk a bit about figure. Yeah. Yeah. Yeah. Please. Yeah.

what what what was the what was the story about the position of the company? Uh why the why now of the IPO? Take us through kind of the road show narrative. Yeah, I think that I think um folks were f focused on probably three things.

One is rare combination of growth and profitability and you know we have both of those which is which is awesome. Yeah. I think number two is just huge market. So we we're in a $185 billion TAM. Basically, we are standardizing all of private credit starting with mortgage.

We also do cryptoback loan, a few other things like that. And we're standardizing those rails on blockchain. And then I think lastly, we are one of the few companies that adds value with blockchain into the real world. So we we're in kind of the real world asset space, which also is called tokenization.

We're the market leader in debt for that. We're about 75% market share. And so what we do is we partner with about 170 really well-recoognized brands that work with us to originate or tokenize assets, put them on a capital market that's all based on blockchain.

And uh what it does is it ultimately saves a ton of cost and time and just improves both the investor experience and the consumer experience. Yeah.

take us through a case study of one of those brands that you work with uh and and walk me through some of the value or the or the differentiated benefits of being in the crypto world. Is it just uh access to international capital, speed of transactions, you can move money around on the weekends, nights and weekends?

Is it regulatory hurdles or being able to access certain markets? Uh walk me through all that. Yeah. No, happy to. I think to to start I'd take something like house just given the audience I feel like people are probably familiar with them. Sure.

They are a kind of housing and home design marketplace and normally somebody like house would not really want to get involved in the loan origination process or really be comfortable with like mortgage or anything of that nature.

But because Figure is so simple to embed, you know, in House's case, we work with an API, we can kind of integrate with them and help their end customers take equity out of their homes for things like home improvement um and financing contractors and pools and and those types of things.

And so what what we actually do in the process is we take the attributes of the loan that you know house is coordinating and those are hashed on a blockchain at once upfront and then as the loans move throughout the capital markets there's way less checking and confirming of those details because people can just verify it on blockchain.

And so what we actually do in doing so is we save about $11,000 of cost out of the production process out of 12. So it's a really big savings and we can do it in 5 days versus industry average of 45. So it's a pretty material difference.

So funny because like the the like the very like popular like anti-crypto take is like oh well you could just do this in a database with like Python and you know high frequency trading doesn't need a blockchain to trade stocks really fast during the market open but like I just I just paid off a car loan and like I'm waiting on the title and I have to like go to an app and like text with somebody.

it's going to take me like weeks to just get that and it's like okay yeah like that other path is not happening and it's been years of like we would like to speed up the the the normal rails and it just hasn't happened. Um but uh so yeah, what I mean raised a ton of money in the IPO.

What what what are the what are the what does that do? What does that change about the company now that there's uh more cash on the balance sheet? What was the structure of the deal and like the the rationale for that amount? Yeah, it's interesting.

So um one thing to point out is with you know at at Figure I'm working alongside Mike Kagy who was also worked with me when I was at Sofi. So he was the CEO there. I was chief revenue officer here. I'm CEO. He's chairman.

And together back at SoFi, we actually raised the largest capital private capital raise um at that time in 2015. It was a billion dollars from SoftBank. Yeah. And what it did was it really catalyzed SoFi's growth over the years. Yeah. And if you look back, that was one of the big differentiators.

And I think it's one of the reasons why SoFi is such a big company today. Uh it really stood out amongst its fintech peers. And so I think from that background, you know, this IPO is similar. It's going to be a major catalyst for figures growth.

It's a big opportunity for us to really raise a lot of capital, come out as a market leader, use that to seed out the marketplaces that we've been doing, right? Figure actually started direct to consumer, then went embedded B2B, then went pure marketplace.

and you need capital to do that to show leadership position and to keep adding to that 170 partner base uh that we have and we're really proud of. What are your lessons from the uh kind of the spa era, the the the the 2021 era?

Um SoFi is like one of the examples that we keep coming back to as a company that has performed really well. Stocks trading at $26 today. Obviously went out of 10. Uh I think it's at all-time highs, doing very well. $30 billion company. It's no joke. And I joined with 75 people. Wow. Yeah. Okay. So yeah.

Um uh but but I mean there obviously there was a lot of there were a lot of different decisions that were made at that time.

What lessons are you are you looking at uh 2021 seeing anything now and and and deciding any structure of the business or decision-m uh currently based on what you learned uh during the last cycle? I'm glad you asked because it's actually something I've been thinking about a lot.

I feel that post kind of 21 and what happened with spaxs a lot of people became very negative on going public and you I don't have it all figured out we this is you know our first day uh but that said I do think from going through the process that going public is something that companies should consider.

I found the markets to be receptive.

I thought you know there's a big premium on growth and I think in the tech world that we all live in everyone's so used to know growth but you meet you meet these kind of investors and the kind of the the pantheon of investments they can make you know when you're growing 20 30 40 50 60% that's just so impressive and unusual and so there's a lot of excitement and I do feel that in the case of and in the wake of what happened with 21 and that hangover over people soured on the public market and everyone thought you know let's not do it and of course there's obviously drawbacks and I'm there's definitely going to be days where I'm going to think you know this is challenge but at the same time I found the capital market to be very receptive and I also found it to be a great branding exercise and really a great way to kind of get liquidity for shareholders so I do think that ultimately it's something that people should consider and not necessarily be afraid of what happened in 21 because there our cycles and I think that's just part of the US capital markets and it's frankly one of the reasons why we're excited about blockchain and its ability to continue to add value and disrupt in some ways.

Yeah. What's the what's the what's the 10-year vision? Yeah. So, right now we are just about 35 basis points of private credit in terms of our market share.

So even though we're a big rapidly growing company, we do see you know we've started by standardizing the mortgage process on blockchain in particular using our integration between the origination system and the capital market which really has never existed before right everyone's doing their own thing I see ramp for example sponsoring this podcast I have background at brex you know those are two companies that are both building separate capital markets um and separate underwriting processes whereas if figure had existed did when both started they could both be on figure just as an example.

And so for us we started in mortgage we started standardizing and homogenizing those assets and making them tradable on a blockchain. We can do the same across every single private credit asset class and beyond. So we're really in the early innings. Makes a ton of sense. It's exciting. Very cool. Uh congratulations.

Congratulations. Thank you for for making time on the big day for for you and the team. And uh little celebration is in order. Take uh you know feel free to take you know back back to work tomorrow but uh but uh Got it. Well, I'm a big fan of you guys. So really appreciate it. An honor to be here.

So thanks so much for having me. Come back come back on whenever you want. We'll talk to you soon after the I guess when when does your quiet period start? Is it Well, not until rings. Yeah. Okay. Okay. Well, fantastic. We'll coordinate. We'll talk to you soon. Awesome. All right. Thanks, gentlemen.

Really appreciate it. Talk to you soon. Bye. Congrats. And that concludes the guest section of TDP Thursday, September 11th, uh, 2025, live back from the TBR. Gary Marcus hit the timeline with an article, Peak Bubble. Peak Bubble. It's hard to see how this won't end badly.

He says, uh, and he the fir he starts the post by sharing the tulip mania Wikipedia. He famously, so the deep learning is hitting a wall now. Yeah. calling. He said, "I don't know when the Genai bubble will end, but this has got to be peak bubble.

" And he's highlighting that Oracle OpenAI signed $300 billion cloud deal. Um, and he said, "In short, OpenAI doesn't have $300 billion. They don't have anywhere near $300 billion by their own. It's not how that works, but optimistic projection, they won't turn a pro. " Yeah.

Well, uh, obviously we can we can steal man for OpenAI and Oracle, but by their own presumably optimistic rejection, they won't turn a profit until 2030. And all of this is from a company uh that thought or claimed that GPD5 was going to be uh close to AGI.

For good measure, Oracle doesn't have the chips they would need to fulfill the contracts or even the cash to buy them. I won't say this is all makeelieve, but well, you do the math. Um he says if Oracle actually collects its 300 billion I will be truly astounded. Mhm.

Um and uh Martin Skrey commented uh on the on the original post and said, "Do you want to short OpenAI at a $500 billion market cap? " Which I think is the expression interesting question, right?

And and um but but that that's not even necessarily the the the take that we've been debating, which is not necessarily open AI. It's it's Oracle. It's it's is Oracle overheated because of the this deal?

Like uh Gary Marcus' claim is that Oracle will not draw all that uh 300 billion down on on schedule and if they if they fail to pull that backlog through then that would be a cause for concern potentially. Um anyway, I wonder what Warren Buffett has to say about all this.

Did you see that he was at the 30th birthday party for Squawkbox yesterday? No way. He's hanging out with Jim Kramer. Yeah, we were hanging out with Jim Kramer yesterday. I didn't realize it was the 30th birthday. The 30th anniversary of Squawk on CNBC. Happy birthday to everyone over there.

Andrew, we got to uh we got to briefly hang with uh Jim yesterday. He is incredibly fun to talk to. Exactly like he is encyclopedic knowledge of stock prices. can just go back, oh yeah, in in 2015 Broadcom was at this price and just rattles it off to the cents. It's remarkable. He knows his stuff. Such a legend.

I'm I'm honestly jealous of of his engagement hack, which is by people by people believing that he always gets trades wrong. Yes. Which is just like fundamentally not Yeah. It's not true at all. Not true. Um they they constantly engage with his post no matter what he said.

So, it's like a way to get like a bunch of real accounts to drive like real engagement. Yes. And and you can imagine he gets an incremental five ten times the impressions because people are just like quoting it, commenting, things like that. But um a master at at what he does and uh and a great entertainer.

Tyler, what was your reaction to either this or Gary Marcus' post? Well, I think for this I think maybe a good segment we should start doing is right after founder comes on, you just immediately say long short. Yeah. That'll make everyone super happy. They will love that.

Uh and then also uh regarding the Gary Marcus thing, I think, um there's that joke about Michael Bur where it's like he's predicted eight of the last two like market crashes. Totally. I think there's something, you know, something there. Yep. Yep. Yep. You're So you're saying this time is different.

I think Gary Marcus has said many times like, "Oh, this is the end. " Yeah.

I mean it's kind of like you know uh just look at the fund returns I guess um if you but he doesn't have a fund so you just kind of have to like um like the the the nature of investing puts your thesis in extremely concrete terms like you are short to what degree are you long are you going long with leverage right now maybe you're you know 60% long and 40% bonds like you can be a variety of risk levels You don't need to be purely I'm bullish or bearish.

You can be anywhere in between that. Uh you can be 100x levered long to 100x levered short. Like you can take wild swings in either direction. So you can express like I'm not feeling great about this particular valuation in a bunch of different ways.

Um and and and as a pundit, I mean someone in the chat was asking about uh the inverse Kramer. Uh it is a meme. It's an ETF. It's done somewhat well in various times.

I've seen a whole bunch of different reports where someone tried to take every single one of Kramer's um calls, put it into a spreadsheet, and see how it would perform. But it's very hard because if he says, "I'm bullish on this company.

" He doesn't necessarily revisit that company every day to tell you when he would sell. So he could say like, "We watch that Apple interview and he says, "I love Apple. Uh it's a it's a stock you own. You don't trade it. " And so like how much credit are we giving him for his Apple call?

Like at some point five years later, he might have seen earnings and been like, "Oh, Apple's in trouble. " And then they and then they quantize that as like he's flipped bearish. When really it's like he didn't necessarily say sell Apple. He just said like this data point is is negative.

And so there's a bunch of ways that it becomes difficult to actually understand like if the mind of Jim Kramer was actually running a fund actively, what would the return profile be? The the other interesting thing is that they there was one analysis that did look at all of his buy and sell ratings.

They tried to get as close as possible to like what it would look like to just take every recommendation and put it in a portfolio.

And they found that it did actually outperformed the market but uh it outperformed the market when the market was going up and it out and it underperformed the market when the market was going down because it was effectively uh like like beta on it wasn't producing alpha it was producing beta bec and and that sort of makes sense in terms of the content creator world because um it when things are going up it it it lends itself to you in enthusiasm and when things are going down it lends itself to to misery and so I don't know overall nice guy and hard to uh hard to, you know, perfectly quantize the uh the value of a call on live TV.

Anyway, Jordy, anything else we should talk about before we get off? Uh Nepal uh yes uh the the Gen Z of Nepal overthrew the government and have chosen their new leader via poll on a Discord server. That is wild. They overthrew the government. That is crazy. Yeah, it's been crazy over there.

I don't know anything about Crazy crazy crazy time in the world. Interesting. Well, we will keep monitoring the situation. Hopefully you can monitor the situation and we will see you