Stock of online marketplace Etsy surges in trading debut - WBOC-TV 16, Delmarvas News Leader, FOX 21 -

Stock of online marketplace Etsy surges in trading debut

Posted:

NEW YORK (AP) - The place where you can buy handmade dresses and crocheted dog costumes has a new hot seller: its own stock.

Shares of arts and crafts retailer Etsy surged in opening trading on the Nasdaq Thursday. After pricing at $16 late Wednesday the stock opened at more than double that, at $34.57.

The healthy stock surge shows that Wall Street has a big appetite for a well-known retail brand, even one that doesn't yet make a profit. Thursday was one of the biggest days for initial public offerings so far this year, with party-store operator Party City and electronic trading firm Virtu Financial also making big debuts.

"it's been a very slow IPO market so far this year and investors have been on the sideline waiting for a new name, especially a new name that's familiar," said Sam Hamadeh, CEO of research firm Privco.

Founded in 2005, Brooklyn-based Etsy sells anything from a $110,000 antique desk from the 1800s to a $20 handmade antler pendant and everything in between. In 10 years it's grown from a scrappy startup offering craftspeople a way to sell necklaces and needlepoint online to a marketplace of 54 million members that generated $1.93 billion in sales in 2014.

While it doesn't make a profit - it reported a loss of $15.2 million in 2014 - it has a very loyal customer base and room for revenue growth. The company says 78 percent of people who bought items on the site in 2014 were return customers.

And although it has a reputation for being a grassroots site, its revenue model is becoming more like Alibaba, the Chinese e-commerce powerhouse. In addition to taking a small percentage of each transaction made on Etsy, it is increasingly offering services like marketing and payment processing to its sellers. About 42 percent of its revenue in 2014 came from services.

Etsy is a B Corporation, a for-profit company with a stated social mission certified by a nonprofit organization called B Lab. That could make for a tricky balancing act of keeping its socially conscious ethos alive while satisfying stockholder demands. But it could help that some shareholders will be Etsy sellers themselves - Etsy planned for 5 percent of the shares sold to be set aside for individual investors, including people who use its site. And it is using $300,000 of the proceeds from the debut to fund Etsy.org, a website established to promote entrepreneurship for women in disadvantaged communities.

So far on Thursday, Wall Street seems to be willing to gamble they'll be able to maintain both.

"We think that it's a very interesting company and investors are going to like the growth they see," said Kathleen Smith, IPO exchange-traded fund manager at IPO research firm Renaissance Capital.

New York-based Etsy is trading on the Nasdaq under the "ETSY" ticker.

  • Business NewsMore>>

  • Sears Files for Chapter 11; to Close Another 142 Stores

    Sears Files for Chapter 11; to Close Another 142 Stores

    Monday, October 15 2018 9:46 AM EDT2018-10-15 13:46:36 GMT
    Monday, October 15 2018 10:12 AM EDT2018-10-15 14:12:10 GMT
    In this July 8, 2017, file photo people walk into a Sears store slated for closing that is next to a mall that is being torn down in Overland Park, Kan.In this July 8, 2017, file photo people walk into a Sears store slated for closing that is next to a mall that is being torn down in Overland Park, Kan.
    In this July 8, 2017, file photo people walk into a Sears store slated for closing that is next to a mall that is being torn down in Overland Park, Kan.In this July 8, 2017, file photo people walk into a Sears store slated for closing that is next to a mall that is being torn down in Overland Park, Kan.
    Sears filed for Chapter 11 bankruptcy protection Monday, buckling under its massive debt load and staggering losses. As part of its bankruptcy, Sears plans to close another 142 unprofitable stores, on top of 46 store closings announced in August.More
    Sears filed for Chapter 11 bankruptcy protection Monday, buckling under its massive debt load and staggering losses. As part of its bankruptcy, Sears plans to close another 142 unprofitable stores, on top of 46 store closings announced in August. More
  • Ahead of 3-way Split, DowDuPont Unveils New DuPont Logo

    Ahead of 3-way Split, DowDuPont Unveils New DuPont Logo

    Thursday, October 4 2018 2:31 PM EDT2018-10-04 18:31:52 GMT
    Thursday, October 4 2018 2:31 PM EDT2018-10-04 18:31:52 GMT
    Ahead of next year's spinoff, the division that will retain the DuPont name has a new look.More
    Ahead of next year's spinoff, the division that will retain the DuPont name has a new look.           More
  • Delaware Officials Eye Changes to Prevailing Wage Rules

    Delaware Officials Eye Changes to Prevailing Wage Rules

    Tuesday, October 2 2018 6:51 AM EDT2018-10-02 10:51:55 GMT
    Tuesday, October 2 2018 6:51 AM EDT2018-10-02 10:51:55 GMT
    State officials are eyeing changes to Delaware's prevailing wage regulations, which govern what workers are paid on public works projects.More
    State officials are eying changes to Delaware's prevailing wage regulations, which govern what workers are paid on public works projects.More
Powered by Frankly

All content © Copyright 2000 - 2018 WBOC. All Rights Reserved. For more information on this site, please read our Privacy Policy, and Terms of Service, and Ad Choices