SAN FRANCISCO - Forge Global Holdings, Inc. (NYSE: FRGE), a prominent player in the private market sector, has introduced Forge Price™, a novel pricing model aimed at transforming the valuation process for pre-IPO venture-backed late-stage companies. This model is now a feature of the company's institutional trading platform, Forge Pro, along with other related data products.
Forge Price™ is designed to calculate a derived, indicative price per share for approximately 250 pre-IPO venture-backed late-stage companies on a daily basis. By aggregating data from various sources such as secondary market transactions, recent funding rounds, and indications of interest on Forge's own platform, the model seeks to provide more current and frequent pricing updates than traditional sources.
The company suggests that Forge Price™ will enable a more timely reflection of company value and price discovery, which could be advantageous for private market participants. Howe Ng, Forge’s EVP of Innovation and Investment Solutions, stated that this pricing model is expected to democratize the private markets by offering new insights and broadening market access.
The integration of Forge Price™ into Forge Pro is said to offer users real-time, actionable insights, which could improve their investment processes. Additionally, historic data sets from Forge Price™ are accessible through various methods, including API and file-based delivery.
Forge Price™ also plays a key role in the development of financial products such as thematic baskets, exemplified by the Private Market Magnificent 7, and it is crucial for powering Forge’s proprietary indices, like the Forge Private Market Index and the Forge Accuidity Private Market Index. These indices serve as benchmarks for private market performance and support index-based investment strategies, including the Accuidity Megacorn Fund, which provides diversified exposure to venture-backed late-stage companies.
Forge Global operates as a marketplace infrastructure and technology solutions provider for private market participants, with Forge Securities LLC being a registered broker-dealer and a member of FINRA. The company's announcement of Forge Price™ is forward-looking and should be evaluated considering potential risks and uncertainties that could affect actual outcomes.
This article is based on a press release statement from Forge Global Holdings, Inc.
In other recent news, Forge Global Holdings Inc has been making significant strides in its core business. UBS analyst Alex Kramm upgraded the company from Neutral to Buy, reflecting confidence in Forge Global's growing transaction volume and a positive forecast for the future. UBS predicts a 65% increase in volume and over a 17% rise in net revenue by fiscal year 2024, driven by improvements in the company's core business and new cost savings initiatives.
Forge Global has also reported its fifth consecutive quarter of revenue growth, with a 15% increase over the previous quarter and a 32% rise year-over-year. Notably, the marketplace revenue experienced a surge by 103% from the same period last year. As part of a strategy to improve margins, the company initiated a cost reduction plan, including an 11% cut in headcount costs, expected to result in annual savings of $11.3 million.
These are recent developments in the company's strategic initiatives, with UBS expecting the secondary trading market for private company shares to continue to experience structural growth. CEO Kelly Rodriques anticipates Forge Global to reach breakeven adjusted EBITDA by 2026, while the company remains committed to investing in its next-generation platform.
InvestingPro Insights
Forge Global Holdings, Inc. (NYSE: FRGE) has been a topic of discussion among investors, as the company's novel Forge Price™ aims to revolutionize pricing in the private market sector. In light of this, it's essential to analyze the company's financial health and market performance to understand its current standing.
InvestingPro data reveals that Forge Global has a market capitalization of $241.77 million, indicating its size within the industry. Despite its innovative approach, analysts have expressed concerns, as reflected in the company's negative price-to-earnings (P/E) ratio of -3.08 over the last twelve months as of Q2 2024. This figure suggests that the company is not generating profits relative to its share price, a sentiment echoed by the InvestingPro Tips, which indicate that analysts do not expect the company to be profitable this year.
Moreover, the company's stock has experienced significant volatility, with a six-month price total return of -50.57%, suggesting that investors have been facing a bumpy ride. This aligns with another InvestingPro Tip highlighting the stock's poor performance over the last month. Nevertheless, it's worth noting that the company's liquid assets exceed its short-term obligations, which may provide some financial stability in the near term.
For investors seeking a deeper dive into Forge Global's financials and market outlook, InvestingPro offers additional tips, providing a comprehensive picture of the company's prospects. With a total of 11 InvestingPro Tips available, investors can access a wealth of information to guide their investment decisions.
The company's next earnings date is scheduled for November 6, 2024, which will be a critical moment for investors to assess Forge's performance and the impact of its Forge Price™ on the market.
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