NEW YORK (Reuters) -Shares of Figma slumped 23% on profit taking on Monday, as euphoria over the design software firm waned days after its blockbuster initial public offering.
San Francisco, California-based Figma shares had scored a massive 250% gain during their market debut on Thursday when they were priced at $33 but finished at $115.50, giving the company a market capitalizationof about $56.3 billion.
Figma'smarket value closed at $59.5 billion on Friday after its shares rose 5.6% to $122. The shares traded as low as $92.75 on Monday, down 23%, reducing its market value to about $45.2 billion.
"The excitement for Figma's business is not over, but the euphoria that's gone into its heady stock pricing seems to be deflating as those that wanted an early piece of the action bought in during market hours while some IPO recipients are probably taking sweet profits," said Michael Ashley Schulman, chief investment officer at Running Point Capital in Los Angeles.
Founded in 2012 and led by CEO Dylan Field, Figma provides cloud-based collaborative design tools, with a roster of marquee clients including Alphabet, Microsoft, Netflix and Uber.
Field owns about 54.2 millionFigma shares worth about $5 billion after selling 2.35 million shares in the IPO. As is common in many Silicon Valley startups, Field retains 74.1% voting power over Figma given his holdings of Class B shares.
Adobe had abandoned a $20 billion deal to acquire Figma in 2023 following antitrust pushback from regulators in Europe and the UK.
"With Figma at a $46 billion market capitalization, Adobe's failed buyout offer must now seem like a distant memory," Schulman added.
(Reporting by Chibuike Oguh in New York; Editing by Richard Chang)
