The stock price of tech start-up Figma Inc. (FIG) more than tripled during its debut on the New York Stock Exchange—and exchange-traded fund (ETF) issuers want in on the action.
Themes ETF Trust is seeking approval from the Securities and Exchange Commission (SEC) to launch the Leverage Shares 2X Long FIG Daily ETF, according to a filing Thursday. ProShares and REX Shares are also looking to introduce leveraged ETFs linked to Figma, which had its initial public offering (IPO) Thursday.
The Leverage Shares 2X Long FIG Daily ETF seeks to magnify the daily performance of Figma's stock by 200%, according to the filing, which didn’t disclose management fees.
The ProShares Ultra FIG—with no ticker or expense ratio included in the preliminary prospectus—also seeks daily investment results that correspond to two times FIG’s daily performance. Eric Balchunas, senior ETF analyst at Bloomberg, also shared on X that Rex Shares filed for a similar fund: the T-Rex 2x Long FIG Daily Target ETF.
Figma is a San Francisco-based company that provides a design platform.
The start-up had previously struck a deal to be bought for $20 billion by the software company Adobe Inc. (ADBE), but that plan was abandoned due to antitrust concerns from regulators in the U.S. and Europe.
It’s no surprise that these issues are looking to capitalize on Figma’s IPO: The stock debuted at $33 per share and closed its first day on the market at $115.50 per share, marking the biggest pop for a $500 million-plus IPO, and the first time a deal that size has ever tripled on day one, Matt Kennedy, senior strategist at Renaissance Capital told etf.com.
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“I think the appeal is that recent tech IPOs tend to be very volatile, which means the stock has the potential for a 5% or even 10% gain in one day, and so a 2x leveraged daily ETF allows traders to really ride those quick run-ups,” Kennedy said. “It's a way of making your bet go further, if you're actively trading the stock during the day.
In June, several fund providers, including REX Shares, sought to launch ETFs linked to the IPO of peer-to-peer payments company Circle. At the time, Daniel Sotiroff, senior manager research analyst for Morningstar Research, said that leveraged ETFs tend to succumb to volatility drag and perform poorly over the long run.
