Figma's stock sinks more than 20% after last week's IPO pop

On Monday, Figma's stock experienced a significant decline, falling by 23% and erasing a portion of its impressive gains from its recent public offering. The shares dropped by $27.50, settling at $94.50 by midday, a steep decline from its closing price of $122 on Friday. The design software firm, along with its primary shareholders, had sold around 37 million shares at $33 each, generating approximately $412 million in proceeds for the company. Following its debut on the New York Stock Exchange last Thursday, the stock had more than tripled in value, indicating a renewed investor enthusiasm for high-growth tech companies amid a historically slow IPO market. In a recent update to its IPO prospectus, Figma projected a revenue increase of about 40% for the second quarter compared to the same period last year. Unlike many tech firms that have gone public in recent years, Figma has consistently reported profits, which sets it apart in the competitive landscape. Currently, Figma's fully diluted valuation stands at around $56 billion, significantly exceeding the $20 billion Adobe offered for acquisition in 2022—a deal that faced opposition from regulators in the EU and the U.K., leading to its cancellation in late 2023. Even after the recent stock dip, Figma's CEO Dylan Field, aged 33, retains a stock portfolio valued at over $5 billion.