After Soaring 250% on Debut, Nasdaq Giant Figma Faces Wild Swings in Rollercoaster Ride [Company & Issue]
by Lee Hyunwoo
Pubilshed 09 Aug.2025 08:30(KST)
Updated 09 Aug.2025 19:15(KST)
Continued Volatility After First-Day Surge
Key Issue: Stock Support After Six-Month Lock-Up Ends
Figma, which became the most successful IPO on the US Nasdaq this year, has experienced wild price swings after a surge on its first trading day, riding a rollercoaster in the market. The company's strong competitiveness in the design industry and solid financial performance are considered advantages. However, the large volume of shares set to be released after the six-month lock-up period is putting significant pressure on the stock price. Experts point out that Figma is overvalued in the stock market, and if its future earnings growth does not stand out, there is a high risk of a sharp decline in its share price.
Once the biggest IPO on Nasdaq... but wild swings within two days
![After Soaring 250% on Debut, Nasdaq Giant Figma Faces Wild Swings in Rollercoaster Ride [Company & Issue]](http://www.asiae.co.kr/news/img_view.htm?img=2025080808414476593_1754610104.jpg)
After its debut on the Nasdaq on July 31 (local time), Figma's share price has repeatedly surged and plunged. On its first day, the stock closed at $115.50, a 250% increase from its IPO price of $33, marking a dramatic rally. As institutional investors rushed to buy, the company's market capitalization soared to $56.3 billion, making the IPO a resounding success.
Even before its listing, Figma attracted attention as the largest IPO on the Nasdaq this year. The initial IPO price was set at $25 to $28 per share, but this was later raised to $30 to $32, and on the eve of the listing, strong institutional demand pushed the final IPO price to $33. Figma succeeded in raising $1.2 billion through its IPO. Bloomberg News described it as "the largest first-day surge in 30 years among US-listed companies that raised over $1 billion."
On August 1, the day after its listing, Figma's share price climbed another 5.6% to $122. However, starting from the next trading day, the stock began to tumble. On August 4, it plunged 27.38% to $88.60, and after further volatility, it dropped to $78.24 on August 7. This represents a 35.86% decline from its post-IPO high on August 1.
Design unicorn challenging Adobe... strong performance and financials are strengths
![After Soaring 250% on Debut, Nasdaq Giant Figma Faces Wild Swings in Rollercoaster Ride [Company & Issue]](http://www.asiae.co.kr/news/img_view.htm?img=2025080807472076491_1754606841.jpg)
Figma is a design software company founded in 2012. It launched its cloud-based design application service in 2016 and last year captured a 40% share of the internet web and mobile design tool market, becoming the industry leader. It is also widely recognized for being used by 95% of the Fortune Global 500 companies as their design tool of choice.
As Figma's market share surged, Adobe, the previous industry leader in design tools, felt increasingly threatened and even made an acquisition offer before Figma's IPO. In September 2022, Adobe offered $20 billion to acquire Figma and entered negotiations, but had to abandon the deal due to antitrust reviews by the European Union and the United Kingdom. In December last year, Adobe officially withdrew from the acquisition and paid Figma a $1 billion breakup fee.
Figma is evaluated as not only dominating the design tool market but also as one of the unicorns with strong performance and a solid financial structure. For the first time, Figma disclosed its financials during the Nasdaq listing: last year, it reported $749 million in revenue, an operating loss of $877 million, and a net loss of $732 million. Most of these losses are attributed to one-time stock-based compensation expenses incurred in preparation for the IPO.
In fact, in the first quarter of this year, Figma posted $228.2 million in revenue, $44 million in operating profit, and $44.9 million in net profit, turning a profit. Its financial structure remains stable, with $1.54 billion in cash assets and total debt of $540 million.
Only 7.6% of shares in circulation... sharp drop feared after lock-up period ends
Nevertheless, the reason Figma's share price continues to fluctuate wildly is the possibility of a sharp, short-term decline when a massive volume of shares is released into the market after the lock-up period ends. At the time of listing, the number of shares in circulation was less than 10% of the total outstanding shares, making the stock highly susceptible to excessive profit-taking, which inevitably leads to price drops.
According to Investing.com, Figma's total number of outstanding shares is 487.5 million. Of these, only 37.1 million shares, or 7.6% of the total, were actually in circulation at the time of listing. About 90% of the issued shares will become eligible for sale after the six-month lock-up period ends, starting at the end of January next year.
There are also growing concerns that the share price has risen far beyond the company's intrinsic value. CNBC investment commentator Jim Cramer analyzed, "Figma's current share price can only be justified if annual revenue grows by more than 40% in the future," and added, "If the company fails to meet these high market expectations, it will be very difficult to maintain the current share price."
Bill Gurley, managing partner at Silicon Valley venture capital firm Benchmark, also pointed out on his X (formerly Twitter) account, "The biggest beneficiaries are the major clients of investment banks who bought shares at the $33 IPO price," and added, "In the end, new investors will have to accept shares whose value has dropped significantly."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.