Why Did Figma Plunge 5.72%? Regulatory Hurdles Weigh on Stock

On August 4, 2025, Figma's stock experienced a significant drop of 5.72% in pre-market trading, reflecting a shift in investor sentiment.

Figma's journey to its initial public offering (IPO) has been marked by both anticipation and uncertainty. Adobe's acquisition announcement in September 2022 has yet to clear regulatory hurdles, leaving the deal in limbo. This regulatory delay has contributed to the volatility in Figma's stock price, as investors grapple with the uncertainty surrounding the acquisition.

Figma's IPO, valued at over $20 billion, was driven by user-driven upgrades and a strong market presence. However, the high valuation has sparked debates about its sustainability and growth potential. The IPO was oversubscribed by over 40 times, indicating high demand but also raising questions about the stock's long-term stability.

Retail investors played a significant role in Figma's post-IPO buying, but their unpredictable behavior has made it challenging to factor them reliably into IPO pricing. This unpredictability has contributed to the stock's volatility, as seen in its recent pre-market drop.