Figma's Tumultuous Post-IPO Slide 10.74% Drop 2.2B Volume and a 33rd-Ranked Reckoning

On August 5, 2025, Figma (FIG) closed at a 10.74% decline, with a trading volume of $2.2 billion, a 43.33% drop from the prior day. The stock ranked 33rd in overall trading activity. The sharp selloff followed a volatile post-IPO trajectory, marked by a 250% surge on its debut before retreating amid profit-taking and valuation concerns. Figma’s initial public offering on July 31 priced shares at $33, but the stock peaked near $140 before the recent correction.

The IPO, which raised $1.2 billion through 37 million shares, included 12.5 million new shares and 24.5 million existing shares. A failed $20 billion acquisition attempt by Adobe in 2023, terminated due to regulatory hurdles, preceded the listing. Figma’s independence post-merger termination allowed it to command a $70 billion valuation during its debut, far exceeding Adobe’s offer. However, analysts highlighted a price-to-sales ratio of 60x–94x, significantly higher than peers like Adobe, raising questions about sustainability.

Jim Cramer criticized the valuation as “detached from reality,” attributing the plunge to overvaluation and market skepticism. Broader market jitters, including warnings from major banks about a potential pullback after a three-month rally, exacerbated the decline. Figma’s limited float—only 7–9% of shares publicly available—intensified volatility as investors cashed in early gains. Despite the selloff, the company maintains strong fundamentals, including $1 billion in projected 2025 revenue and a dominant enterprise client base.

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