- Forge Global Holdings (NYSE:FRGE) stock just reported mostly strong earnings for the first quarter of 2022
- FRGE stock has been volatile since the company’s March 2022 initial public offering (IPO)
- Shares of FRGE have risen all day after falling yesterday
Forge Global is trending in the green today after recently reporting earnings. The company may allow investors to trade private securities, but its own public shares have performed well since the report indicated rising demand for its services. FRGE stock closed up more than 25% for the day.
Forge came public via a special purpose acquisition company (SPAC) merger in March 2022 after reporting 75% revenue growth in 2021. Since then, the stock has seen considerable volatility, but it has performed well overall. Despite falling yesterday prior to earnings, it’s still in the green by more than 60% for the month.
The company’s Q1 2022 earnings weren’t all positive, but markets are still reacting well. For the period, total revenue less transaction-based expenses decreased to $19.9 million, down from $31.1 million in the prior-year quarter. Additionally, Forge’s total operating loss of $38.8 million isn’t as rosy as its prior-year $2.2 million gain. However, the net take rate remained constant throughout Q1 at 3.5%, indicating no change from the previous year. Total custodial accounts increased as well, rising 25% year-over-year (YOY) to 2.2 million.
Overall, CEO Kelly Rodriques is optimistic about the company’s future:
“More companies are staying private longer. They are creating more value while private and we believe that the need for employees and shareholders to access liquidity while a company is private will only continue to grow. Even amid the volatility in Q1, there were more distinct private companies with shares offered for sale on the Forge platform than in any previous quarter. Forge is well positioned to meet the demand for liquidity and access to this new asset class as pricing expectations stabilize and markets find equilibrium.”
This past quarter has been difficult for many companies, but Forge has performed quite well, all things considered. FRGE stock has risen more than 100% since the IPO.
What’s Next for FRGE Stock
If Rodriques is correct about rising demand, investors can expect a profitable quarter ahead. Forge’s competitive edge comes from the fact that, despite operating in the financial services sector, its market is still fairly niche. There are not that many companies that provide investors with a marketplace to trade private securities. Forge is well-positioned to secure a share of that market.
Even though Forge reported losses in several important categories this quarter, FRGE stock still shot up immediately afterwards. If the company reports better earnings next time, shares will likely rise even more.
On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
