Asset reviews 31/07/26 FIG, IT, XLM/USD, AKT/USD

0:09 – 22:11

Figma, a falling knife that might be more than junk

The first chart looks like a trap. Figma has come public and then simply imploded, with Tom calling it what it is: a falling knife. His core rule lands early and hard, do not confuse cheapness for value. A stock being down 88% does not make it attractive by itself, just like pulling an old boot out of the water does not count as catching a fish. With almost no prior uptrend to anchor retracements, support, or Fibonacci levels, he argues that pure technical analysis has very little to work with here. Still, he does not stop at shrugging. He goes hunting for the only constructive possibility available, a bottoming structure near the lows. On a smaller timeframe he sketches a possible inverted head and shoulders and tests whether the first bounce could be impulsive or just corrective. He keeps rejecting his own prettier bullish counts when the wave relationships do not hold up, which is one of the useful parts of the review. He is willing to say, in effect, this might be a low, but the evidence is weak and the burden of proof is on price. What would improve the case? Breaking the sequence of lower lows and lower highs, pushing through the channel, then backtesting it successfully. Until then, the bears still own the chart. Then the surprise arrives. The chart looks awful, but the company is not the disaster he expected. Revenue is growing. The business is still loss-making, which he flags as a real negative, but the balance sheet is cleaner than the price action suggests. He notes a good working capital setup, little debt, expanding equity, and, most importantly, several quarters of positive free cash flow. That changes the story from obvious junk to genuine speculation. Simply Wall Street still shows it as overvalued on discounted cash flow, and Tom says a $13.1 billion valuation looks rich for a business that is not profitable yet. But the unexpected angle is this: a terrible chart does not always equal a terrible business. His conclusion is cautious rather than dismissive. If someone wants to speculate, size it like a true speculative position, something small enough that a total wipeout would not damage the portfolio. His preferred software exposure remains proven companies with cash flow and earnings, not fresh listings still proving themselves. But for Figma, the memorable takeaway is that the chart says, not yet, while the financials say, maybe worth watching.