Activity in the initial public offering (IPO) market is accelerating following a spring freeze. According to Renaissance Capital, there have been 116 IPOs priced this year through July 23, a 50.6% increase from the year prior.
Total proceeds from this year’s filings are down 3.4% year over year to $17.1 billion.
This year’s biggest IPOs include stablecoin issuer Circle Internet Group (CRCL) and CoreWeave (CRWV), an artificial intelligence (AI) cloud company, which raised $1.05 billion and $1.5 billion, respectively, in their offerings.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more – straight to your e-mail.
Profit and prosper with the best of expert advice – straight to your e-mail.
Wall Street will now turn to Figma, a design software company and former Adobe (ADBE) acquisition target, which is set to go public in late July.
When is the Figma IPO date?
In early July, Figma publicly filed its paperwork with the Securities and Exchange Commission to go public. And on Monday, July 21, the software firm priced its public offering, saying it plans to sell roughly 37 million shares – which includes stock from existing shareholders – at $25 to $28 apiece.
Figma’s prospectus also indicates that it has authorized the issuance of blockchain common stock “that our Board of Directors could use to, among other things, issue shares of our capital stock in the form of blockchain tokens,” though it added that it doesn’t have any specific plans currently to do so.
The company is expected to begin trading sometime next week on the New York Stock Exchange under the ticker symbol “FIG.”
Figma also provided preliminary results for its second quarter. In the three months ending June 30, Figma said revenue was up 40% year over year at the midpoint of its expected range.
It also expects non-GAAP operating income to arrive between $9 million and $12 million vs $4.9 million in the year-ago period.
In Q1, the company saw revenue rise 46% year over year and generated net income of $44.9 million. As of March 31, it had 13 million active monthly users, and 95% of Fortune 500 companies are customers.
What is Figma’s valuation?
In 2022, blue chip stock Adobe agreed to buy Figma for $20 billion, but the acquisition was called off as regulators in the U.K. expressed antitrust concerns.
Shortly after the deal fell through in late 2023, Figma reset its internal valuation to $10 billion.
If its current pricing of $25 to $28 per share holds, Figma’s IPO could value the company at $14.6 billion to $16.4 billion. This would put it in the same neighborhood as consumer products giant Clorox (CLX) and cybersecurity stock Okta (OKTA).
Should you buy FIG stock?
“An initial public offering enables a private company to ‘go public,’ or start trading in public markets, by issuing its own shares on a stock exchange for the first time. In this way, any investor can buy shares and the company can raise capital to grow,” Taulli writes in his article, “What Is an Initial Public Offering (IPO)?“.
But buyer beware: IPOs can be volatile – especially for retail investors. While new stocks tend to have strong first-day showings, returns for the first year are generally weak, says the team of analysts at Trivariate Research, a market research firm based in New York.
As for retail investors, whether or not you buy the Figma IPO comes down to your own risk tolerance and personal investing goals. If you do decide to buy shares of FIG stock when they first begin trading, do so in a small amount that you can afford to lose and have a trading plan in place.
