Design platform Figma Inc. (NYSE:FIG) defied Jim Cramer’s warnings about its valuation, surging 250% to $115.50 on its market debut on Thursday after pricing its IPO at $33 per share on Wednesday evening.
Cramer Warns of Overvaluation
Hours before trading began, CNBC host Cramer posted multiple warnings on social media, calling Figma “way too expensive” at 54 times sales, assuming a 40% growth rate. He urged investors to “pull” market orders, predicting they could “get it lower.”
“If you are putting in a market order from Figma you should pull it now. You will get it lower. It is near 50x sales!!!!” Cramer posted 17 hours before market open.
The Mad Money host later acknowledged the stock remained “too high” but noted investors were “getting too excited and paying these prices.”
The surge aligns with the “Inverse Cramer” phenomenon, where stocks often move opposite to Cramer’s predictions. The Inverse Cramer Tracker ETF (SJIM) was liquidated in February 2024 after tracking this pattern, with creator Matthew Tuttle stating the fund accomplished its mission of highlighting “the danger of following TV stockpickers.”
Strong IPO Performance Despite Concerns
Figma raised approximately $411 million by offering 36.9 million Class A shares at $33 each. The San Francisco-based company’s shares opened dramatically higher, reaching $143.45 in after-hours trading — a 24.2% additional gain.
Morgan Stanley, Goldman Sachs Group Inc., Allen & Company LLC and JPMorgan Chase & Co. served as joint lead book-running managers.
Solid Fundamentals Drive Investor Interest
The collaborative design platform reported $749 million in revenue for 2024, marking 48% year-over-year growth. First quarter 2025 revenue reached $228.2 million, up 46% from the prior year period.
Figma serves 95% of Fortune 500 companies and 78% of Forbes Global 2000 firms. Major clients include Microsoft Corp. (NASDAQ:MSFT), Alphabet Inc. (NASDAQ:GOOGL) (NASDAQ:GOOG) and Salesforce Inc. (NYSE:CRM). The company’s Net Dollar Retention Rate was 134% at year-end 2024.
Meme Stock Potential Predicted
Nikita Bier, Head of Product at Elon Musk‘s X platform, predicted Figma “is going to be a meme stock beyond all comprehension” ahead of the IPO. Research shows 40% of hedge funds now use social sentiment analytics for trading strategies in 2025, compared to 10% three years ago.
The IPO follows the collapsed $20 billion acquisition by Adobe Inc. (NASDAQ:ADBE) due to regulatory concerns.
Price Action: Figma is trading higher in Friday's premarket session, up 12.03% to $131.74, according to data from Benzinga Pro.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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