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Figma’s stock experienced a sharp pullback on Monday, falling 27% from its late-week peak following an impressive debut on the New York Stock Exchange last Thursday. The shares closed Monday at $88.60, down from Friday’s close of $122, erasing a significant portion of last week’s gains.

IPO Details and Market Performance

Figma, a leading collaborative design platform, priced its IPO shares at $33 each, selling about 37 million shares and raising approximately $412 million. On its first day of trading, the stock surged to more than triple its IPO price, reflecting strong investor demand for high-growth tech companies after a subdued period for initial public offerings.

The company’s fully diluted valuation now stands around $56 billion, nearly three times higher than the $20 billion acquisition offer made by Adobe in 2022—an agreement that was ultimately abandoned due to regulatory opposition from the EU and U.K. competition authorities in late 2023.

Financial Health and Growth Prospects

Unlike many recent tech IPOs, Figma has a track record of profitability, an aspect that sets it apart in a market still wary of unprofitable startups. The company projected a 40% increase in second-quarter revenue year-over-year, signaling robust business momentum.

CEO Dylan Field’s Rising Wealth

Figma’s 33-year-old CEO, Dylan Field, now joins the ranks of tech billionaires, with his stake valued at over $5 billion even after Monday’s stock price decline. Field’s leadership in transforming Figma from a startup into a dominant design platform has been central to the company’s valuation surge.

Market Context and Outlook

The volatility in Figma’s stock highlights the broader challenges tech companies face after IPO hype fades and the market reassesses valuations. Analysts note that the company’s strong fundamentals and innovative product position it well for sustained growth, but investors remain cautious amid broader economic uncertainties and fluctuating tech sector sentiment.