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Figma | NFP
The Wall Street Skinny
August 07, 2025
This Week on The Floor
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Figma’s IPO: epic success, or underwriter blunder?
Truth Hurts…and Helps?! The irony of Friday’s Non-Farm Payroll Report
Markets Recap / Deal News
Interviewing this week? Here’s some content for your conversation.
Figma’s 250% IPO Pop: Why It Wasn’t All Good News
You almost certainly saw the headlines: Figma’s IPO shares tripled on their first day of trading, closing at $115 after pricing at just $33. That’s a 250%+ gain, one of the biggest pops in recent IPO history.
As of today, it is down to $80, but that is still 2.5x its IPO price.
But what you might not have realized is what this meant for insiders and early VC investors, and why some of them may be less thrilled than you’d think.
Leaving Billions on the Table
Figma’s IPO involved two buckets of shares:
12.5 million primary shares sold by the company (to raise capital)
24.5 million secondary shares sold by existing investors (to cash out)
That’s 37 million shares sold at $33 apiece, bringing in around $1.2 billion in proceeds.
But here’s the kicker: with shares closing at $115, that means the market was willing to pay $82 more per share just hours later. Do the math: 37 million shares x that $82 delta = $3 billion left on the table. And even if we use the more conservative $80 share price where it’s trading today, that’s still $1.74bn.
For the company, that means significantly less cash raised. For the VCs, that’s billions in forgone upside.
And it wasn’t for lack of awareness. According to Bloomberg, Figma and its banks considered pricing the IPO higher, but CEO Dylan Field ultimately chose to price at $33 to attract long-term institutional shareholders. Why? Those investors specifically tend to be long-term holders of the stock and are much more focused on fundamentals rather than momentum and hype. Field reportedly signed off on that pricing strategy after weighing the kind of investors he wanted. His involvement suggests this wasn’t a huge blunder by the underwriters, but instead a calculated decision.
A Strategic Sacrifice?
The idea of deliberately underpricing an IPO to ensure an IPO trades well on the follow isn’t new. In fact underwriters typically try to price deals at a 15% discount to fair value. The reason? You WANT a pop in the share price when the stock price closes on the day of the IPO to signal it’s a success and to reward new issue buyers. However, with demand as sky-high as Figma’s (reports suggest the deal was 40x oversubscribed) and a market starved of high quality IPOs, it’s not obvious that they did the right thing.
For some, this outcome is a sign of healthy discipline, prioritizing long-term holders and momentum in the aftermarket. For others, it’s a sign that the IPO process is still broken, benefiting institutions at the expense of the company and its earliest believers.
Whatever your view, this IPO will likely set the tone for the rest of 2025. The big question now: will Figma’s massive pop open the floodgates for long-awaited tech IPOs, or is it just an exceptional case tied to Adobe’s failed $20bn acquisition and a scarcity of design-tool competitors?
When the Truth Hurts…and Helps!?
The July Non-Farm Payrolls Report, the Federal Reserve, and the President
If you’re new to the global financial markets, specifically the economic data that moves asset prices, it can be hard to distinguish between signal and noise. We’ve explained the importance of the monthly Non-Farm Payrolls Report in the past, which is released the first Friday of every month reflecting the prior month’s data. And Friday’s NFP was a masterclass in why this data matters so much.
On Friday, the BLS (Bureau of Labor Statistics) published the Non-Farm Payrolls Report for July. In a surprise to the downside, the U.S. economy added only 73,000 jobs versus consensus estimates of 109,000. The unemployment rate ticked up slightly to 4.2%.
On its own, this report shows that the labor market in the U.S. softened more than anticipated. And while it may seem like a big miss, the headline number’s deviation from expectations was not particularly exciting on its own. By contrast, in February 2023, the NFP print exceeded economists’ expectations by 324,000 to the upside. In April 2020 during the chaos of COVID, it missed by 642,000 jobs to the downside. Both of those gigantic misses led to not only massive market volatility, but ultimately Fed action.
What truly shocked the markets about July’s report was the scale of revisions to PRIOR months. The revised numbers for May and June showed 258,000 fewer jobs than previously reported. That magnitude of revision hasn’t been seen since COVID, when reporting issues understandably impacted data collection.
Economists speaking on recent episodes of Odd Lots and Planet Money acknowledged that reporting from business and household surveys has been in a steady decline, and never fully recovered from the dropoff experienced during COVID. Shocks to small businesses — such as new tariffs, or concerns around an immigrant labor force —may also impact their ability to report numbers in a timely, accurate manner.
How did the market react? 2-year Treasuries, a great bellwether for gauging the market’s anticipation of the Fed’s next move, rallied 25 basis points on the news. That’s a clear repricing of the likelihood that the Fed will cut rates in response to weakness in the labor market.
For context, 2’s have rallied 25 basis points intraday or more on only ~13 days in the past 25 years. That short list includes the collapse of Lehman Brothers in 2008 and the unwind of the Yen carry trade exactly one year ago to the day. A shift of that magnitude in 2’s is an unmistakable message that the market is taking this news seriously.
Then, the rally continued after Fed Governor Adriana Kugler announced her resignation later that same day. The theory? This vacancy opens the door for a new appointee who might be more dovish and favorably inclined towards the rate cuts President Trump has been calling for.
And in a wild turn of events to cap off the afternoon, President Trump abruptly dismissed the Commissioner of the BLS, Erika McEntarfer. His reasoning? That the revisions in May and June’s data were politically motivated and a deliberate effort to undermine confidence in the economy under his watch.
The irony? Trump has been championing lower interest rates ever since he took office, something the Federal Reserve has not delivered, as they’ve waited for clear signals in the data. Softness in employment data is exactly the kind of signal the Fed needs to cut rates. The July NFP report, with its revisions to prior months, delivered perhaps the most cut and dry argument we’ve had for the Fed to ease monetary policy year-to-date. It begs the question, why shoot the messenger for delivering the precise news to bolster the case?
While there was no particularly quantifiable reaction in the markets to McEntarfer’s dismissal, critics on both sides of the political spectrum have argued that her firing casts equal skepticism on future data to the upside OR downside. Without confidence in the reliability of economic data, how can investors make decisions with conviction? And what potentially flawed policy decisions might be made in the future based on questionable data?
Moreover, while the market has made up its mind, the Fed has yet to take action. With tariff rates still in flux, it’s not immediately clear that prices will remain relatively stable. Just because there’s a clear signal on the employment side of the Fed’s dual mandate does not mean we will get a similar green light on the inflation side.
The risk (and irony) here is that the dismissal of the BLS commissioner casts doubt on the integrity of the very institutions we rely on to provide clear signals as to the path of monetary policy, JUST when we got the signal we’d been waiting for.