Figma shares dropped 23% on August 4, after a surge following its IPO last week.

The company debuted on July 31, at US$33 per share and closed at US$115.50, valuing it at about US$56.3 billion.

Shares rose to US$122 by August 1, but fell to as low as US$92.75 on August 4, cutting its market value to around US$45.2 billion.

Michael Ashley Schulman, CIO at Running Point Capital, said the drop was due to profit-taking by early investors after the rapid rise.

Figma counts Alphabet, Microsoft, Netflix, and Uber as clients.

CEO Dylan Field owns about 54.2 million shares worth US$5 billion and holds 74.1% voting power via Class B shares.

Adobe’s US$20 billion bid to acquire Figma was dropped in 2023 due to regulatory hurdles in Europe and the UK.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ Adobe’s failed acquisition now looks like a massive missed opportunity

Adobe’s $20 billion offer to acquire Figma in 2023 was blocked by regulators but now appears undervalued compared to Figma’s post-IPO market capitalization of over $45 billion 1.

This represents more than double what Adobe was willing to pay just two years ago, highlighting how quickly market dynamics can shift in the design software space.

The timing particularly stings for Adobe given that Figma has since captured a commanding 40.65% market share in design software, significantly outpacing Adobe XD’s 13.54% share 1.

Adobe’s own revenue growth of just 11% pales in comparison to Figma’s 48% year-over-year surge, reaching $749 million in 2024 2.

The regulatory intervention that seemed costly at the time has now allowed a direct competitor to become a $45+ billion public company, fundamentally altering the competitive landscape Adobe once dominated.

2️⃣ Figma transformed design from a specialist function to an organization-wide capability

Recent Figma developments