Figma Stock Takes a Hit after Stellar IPO

Figma Stock (FIG) fell 27.4% after its IPO, but analysts remain optimistic about its long-term prospects. The company's cloud-based design tools are widely used by major firms like Alphabet and Microsoft. Despite a pullback, Figma's CEO still controls 74% of voting power, and its valuation is expected to continue growing due to high gross margins and retention rates.

Figma Inc. (FIG), the cloud-based design platform, experienced a significant surge in its stock price following its initial public offering (IPO) on July 1, 2025. The stock jumped 250% on its debut, marking the largest first-day increase for a US-traded company exceeding $1 billion in three decades [1]. Despite this impressive start, the stock faced volatility on its second trading day, rising as much as 333% above the IPO price before paring gains [1]. As of press time, the stock traded at $126 per share, up from the IPO price of $33 per share [1].

The IPO raised $1.2 billion, with a fully diluted market capitalization of $19.5 billion [2]. Figma's strong financial performance, including a 48% year-over-year (YoY) increase in revenue to $749 million and a 46% revenue growth over four quarters, drew significant investor interest [2]. The company's browser-based design platform has 13 million monthly active users, with major clients such as Google, Microsoft, Netflix, and Uber [2].

However, Figma's stock faced a significant pullback, falling 27.4% after its IPO debut [1]. Analysts remain optimistic about the company's long-term prospects, citing high gross margins and strong retention rates. Gil Luria, an analyst at DA Davidson, noted that Figma's focus on AI capabilities could drive adoption and increased usage of the platform [1].

Figma's CEO, Dylan Field, maintains significant control over the company, holding 74% of the voting power [1]. The company's valuation is expected to continue growing due to its high gross margins and strong financial performance.

The IPO comes after a multiyear lull in the tech IPO market, which began in early 2022 due to inflation and rising interest rates [2]. However, Figma's strong financial performance and growing user base have reignited investor interest in tech IPOs.

References:
[1] https://economictimes.indiatimes.com/markets/stocks/news/listing-or-blitzing-figma-stock-soars-250-higher-on-day-1-on-wall-street/articleshow/123055420.cms
[2] https://www.ainvest.com/news/figma-debuts-33-share-30x-oversubscribed-ipo-raises-1-2-billion-2508/