Figma Shares Plunge 80.51% After 180-Day Lock-Up Expires
Figma stock fell 80.51% from its $143.45 peak to $22.51 after the Jan. 27 expiration of its 180-day post-IPO lock-up period. Early employees are now selling shares below the $33 IPO price due to analyst downgrades citing sector volatility and AI competitive pressures.
1. Share Performance and Lock-Up Expiry
Figma’s public debut surge was followed by a dramatic reversal: the company’s shares have fallen more than 80% from their peak over the past six months, trading well below their initial offering level. The expiration of the 180-day lock-up period on January 27, 2026 released a wave of insider shares, exacerbating downward pressure. Early employees who accumulated equity over a decade now face paper losses as they are free to sell into a market already weighed down by heavy selling from other insiders and diminishing investor enthusiasm for high-growth software names.
2. Revenue Growth and Path to Profitability
Despite the share decline, Figma reported 38% year-over-year revenue growth in its latest quarterly filing and reiterated guidance for 35% top-line growth in the upcoming quarter. The company has also generated positive free cash flow for two consecutive quarters, narrowing its operating losses by 25% compared to the prior year. Recurring revenue from enterprise customers has strengthened, with the cohort of clients spending at least $100,000 annually expanding by 40% over the past twelve months.
3. Competitive and Valuation Pressures
Investor concerns have centered on the threat posed by AI-enabled incumbents and startups, prompting multiple analyst downgrades. One major research firm cut its price target by 50%, highlighting a reevaluation of SaaS multiples across the sector. Figma’s market share gains in design collaboration could be challenged by the AI roadmaps of larger software providers. At the same time, the broader SaaS index has fallen over 20% year-to-date, reflecting a reassessment of growth premium in an environment of rising rates and slowing corporate IT budgets.
4. Long-Term Outlook and Addressable Market
Looking ahead, Figma’s management points to a total addressable market exceeding $33 billion, driven by demand for collaborative design tools in technology, retail, and manufacturing verticals. With operating leverage beginning to materialize and enterprise deal sizes increasing, the company could deliver sustained revenue growth above 30% annually. Should Figma continue converting free cash flow into profitable growth, its current valuation may present an attractive risk-reward opportunity for patient investors over the next five years.