Figma's IPO Frenzy Ends with $21 Billion Drop

Figma's stock has dropped $21 billion from its peak after a record-breaking IPO, with shares trading below the $85 level. The design software firm's stock initially surged 250% on its first day, but has since given back much of the increase. Figma's market value now stands at around $39 billion, down from a peak of almost $60 billion. The stock trades at a price-to-sales ratio of 37, which is higher than comparable firms like Adobe and Shopify.

Figma Inc.'s stock has experienced a significant drop following its record-breaking initial public offering (IPO), with shares trading below the $85 level. The design software firm's stock initially surged 250% on its first day, but has since given back much of the increase. Figma's market value now stands at around $39 billion, down from a peak of almost $60 billion [2].

The company's stock price volatility is notable, with a price-to-sales ratio of 37, which is higher than comparable firms like Adobe and Shopify. This valuation is significantly higher than most technology companies, with only Palantir Technologies Inc. having a comparable price-to-sales multiple [2].

The IPO's initial success was driven by strong demand and a limited supply of shares, with only 7% of the outstanding stock available for trading. However, the rapid rise and subsequent decline in stock price indicate the speculative nature of the market and the influence of social sentiment on stock performance [2].

Analysts and industry experts have noted that Figma's post-IPO performance signals broader market trends. Jai Das, president and partner at Sapphire Ventures, cautioned that while Figma's financials were impressive, the share price was also influenced by human behavior and market sentiment [1]. Nikita Bier, Head of Product at Elon Musk's social media platform X, echoed this sentiment, predicting that Figma could become a "meme stock beyond all comprehension" [2].

Despite the volatility, Figma reported strong financials for 2024, with revenue of $749 million and a four-year compounded annual revenue growth rate of 53% [1]. The company's impressive gross profit margins of 88.5% further indicate its financial health [3].

In conclusion, Figma's IPO was a success, but its post-IPO performance highlights the complex dynamics of the current market. The stock's movement is influenced more by hype and social sentiment than by fundamentals, a trend that is likely to continue in the coming years.

References:
[1] https://techcrunch.com/podcast/figmas-ipo-success-is-a-little-bit-of-a-meme-stock-says-sapphire-ventures-jai-das/
[2] https://www.bloomberg.com/news/articles/2025-08-08/figma-s-21-billion-drop-returns-stock-to-earth-after-ipo-frenzy
[3] https://www.investing.com/news/insider-trading-news/figma-director-lilly-iii-buys-2-million-in-stock-93CH-4171797