04.08.2025 20:15

Figma's initial public offering (IPO) euphoria on Wall Street evaporated swiftly, marking a dramatic downturn just days after its debut. A staggering 23% plunge in the company's stock price on Monday sent shares plummeting from Friday's closing price of $122 to a midday low of $94.50. This sharp decline essentially erased nearly all the gains accumulated since its highly anticipated IPO last Thursday.

This precipitous fall occurred only four days after Figma and its major stakeholders sold a substantial 37 million shares at $33 apiece, generating approximately $412 million in proceeds for the company. The initial trading session on the New York Stock Exchange had witnessed an overwhelming investor response, with the stock price more than tripling, reflecting significant appetite for high-growth technology companies. However, this intense demand proved short-lived, vanishing almost instantaneously by Monday.

Despite Figma's projections of a robust 40% year-over-year revenue increase in the second quarter, as disclosed in its IPO filing, and its unusual profitability amongst recent tech IPOs, the broader market volatility proved insurmountable. The company’s valuation now stands at approximately $56 billion, a figure nearly three times the $20 billion Adobe offered in a failed acquisition attempt in 2022. This deal, ultimately blocked by regulators in the UK and the European Union, was formally abandoned in late 2023.

Despite the significant stock price drop, Figma’s 33-year-old CEO, Dylan Field, still retains a considerable stake worth over $5 billion. This market turmoil prompted prominent analysts at Morgan Stanley, Deutsche Bank, and Evercore ISI to issue warnings about an impending market correction. Following a three-month rally that propelled the S&P 500 Index to record highs, these firms are now advising clients to brace for substantial market declines. In fact, Morgan Stanley's chief U.S. equity strategist, Mike Wilson, even forecasted a 10% market correction.