Figma (FIG) saw its stock price plummet by 5.04% in Wednesday's trading session, following the announcement of a settlement in its intellectual property disputes with Motiff. The agreement, which was made public late Tuesday, appears to have been received negatively by investors, despite Figma seemingly achieving most of its objectives.

According to the settlement terms, Motiff will cease selling its current Motiff Editor Tool globally, with the exception of China, where it may continue sales for one year. Additionally, Motiff has agreed to reimburse Figma's legal expenses. While these terms might appear favorable for Figma at first glance, the market's reaction suggests that investors may have concerns about the deal's implications.

Analysts speculate that the stock's sharp decline could be attributed to several factors. The allowance for Motiff to continue operations in China for a year might be viewed as a significant concession, potentially impacting Figma's growth in the crucial Chinese market. Furthermore, the reimbursement of legal expenses, while beneficial, may not fully offset the costs incurred during the dispute. Some market observers also suggest that investors might have been expecting a more comprehensive victory for Figma, and the settlement terms fell short of these expectations.