Figma shares dropped 27% on Monday after soaring in their market debut last week, cutting into the gains posted after hitting the market.
Why it matters: Figma’s fully diluted valuation now sits at approximately $56 billion, almost triple the amount Adobe agreed to pay in its 2022 acquisition offer that fell apart due to regulatory pushback.
The details:
- Figma and top stockholders sold about 37 million shares late Wednesday, yielding around $412 million in proceeds to the company.
- On Thursday, its first day of trading on the New York Stock Exchange, the stock initially surged, reflecting a renewed appetite on Wall Street for high-growth technology companies after a historically slow stretch for initial public offerings.
- In its updated IPO prospectus, Figma stated that it expects second-quarter revenue to increase by about 40% from the previous year.
- Unlike many technology companies that have gone public in recent years, Figma has consistently posted profits.
Dylan Field, Figma’s 33-year-old CEO, remains a major shareholder in the company, which is worth more than $5 billion even after Monday’s stock slide.
What they’re saying:
- “The excitement for Figma’s business is not over, but the euphoria that’s gone into its heady stock pricing seems to be deflating as those that wanted an early piece of the action bought in during market hours while some IPO recipients are probably taking sweet profits,” said Michael Ashley Schulman, chief investment officer at Running Point Capital in Los Angeles.
- “With Figma at a significant market capitalization, Adobe’s failed buyout offer must now seem like a distant memory,” Schulman added.
The background: Adobe had abandoned a $20 billion deal to acquire Figma in 2023 following antitrust pushback from regulators in Europe and the UK.
What’s next: Tech industry insiders are sharing their picks for the next startups poised to ride the IPO wave following Figma’s blockbuster debut, with notable names like Canva, Revolut, Midjourney, Motive, and Anduril frequently mentioned in discussions.