Overseas stock individual investors, known as 'Suhakgaemi,' are actively investing in U.S. large-cap technology stocks as well as newly listed stocks. However, due to the nature of newly listed stocks, which are volatile, most investors are showing losses.
According to the Korea Securities Depository (KSD) on the 11th, the overseas stock most net bought by domestic investors in the past week (from Aug. 1 to 7) was Figma (FIG). During this period, overseas stock individual investors bought $138.86 million (193 billion won) worth of Figma shares.
Figma is a corporation that provides a cloud-based design and collaboration platform, offering services that allow for real-time simultaneous work by utilizing an artificial intelligence-based consolidation platform. As of March this year, it has drawn attention for having 95% of Fortune 500 corporations using its services.
It gained more attention particularly when Adobe announced in 2022 that it would acquire Figma for $20 billion. However, the acquisition was halted as the European Union (EU) regulatory authorities deemed it could hinder market competition.
Figma, which had attracted interest as the largest initial public offering (IPO) in the U.S. Nasdaq before going public, finished trading at $115 on last month's listing day, the 31st. This was over three times the public offering price of $33. The following day, the stock price surged to nearly four times the public offering price at $142.92, prompting overseas stock individual investors to jump in as buyers.
The problem is that the upward trend did not last long. Figma's stock price plummeted about 27% on the 4th, falling to the $80 range. By the close on the 8th, the stock price was only $78.11. Following the initial surge in Figma's stock price after the IPO, a large volume of profit-taking sales significantly impacted the price. Figma's market capitalization reached $59.4 billion on the 1st, three times the amount Adobe proposed for its acquisition.
Most 'Suhakgaemi' investors in Figma are currently in the loss zone. The average evaluation loss rate for 5,073 Figma investors linked with Naver Pay's 'My Asset' service is 26.56%. Approximately 90% are in the loss zone.
The performance of U.S. newly listed stocks is generally poor. Based on Naver Pay's asset service, Venture Global (VG), a liquefied natural gas (LNG) supplier that went public in January this year, has an average evaluation loss rate of 22.14%. The stablecoin issuer Circle Internet (CRCL), which attracted many overseas stock individual investors right after its listing in June, also has an average evaluation loss rate of 22.22%.
This is because most overseas stock individual investors are investing right after the IPO rather than participating in the offering. While there are pathways to participate in U.S. IPOs through domestic securities firms, the feasible options are limited, and the number of allotted shares often depends on the discretion of the lead underwriter, making it difficult to receive allocation.
In the process of stock price volatility for newly listed stocks, 'averaging down' is not necessarily always the answer. This is partly because the volume locked away in escrow may be substantial. Immediately, in Figma's case, it is expected that the mandatory holding period will be lifted around January 2026. Figma's total issued shares are about 487.5 million, but only about 37 million shares were made public through the IPO.
Forbes noted that 'only a portion of the overall stock was made available for public trading during Figma's IPO, with about two-thirds of the stock being held by insiders,' and added, 'If a considerable number of insiders choose to cash out, the supply of stock hitting the market could dramatically increase, putting downward pressure on stock prices.'