Etsy heads for biggest gain since 2015 after funds reveal stake
SAN FRANCISCO - Shares of Etsy Inc <ETSY.O> surged more than 23 percent on Tuesday and were on track for their biggest daily gain since 2015 after two investment firms revealed stakes in the online crafts retailer and the company said it was reviewing its strategy.
Etsy nearly doubled in its 2015 stock market debut but then moved steadily lower, never to regain its early high as it faced competition from rivals including Amazon.com <AMZN.O> and Facebook Inc <FB.O> and failed to grow at the rate expected by Wall Street.
TPG Group Holding Advisors Inc and Dragoneer Investment Group LLC late on Monday jointly reported an 8 percent stake in Etsy, a disclosure that came just weeks after activist hedge fund Black-and-White Capital LP, which owns roughly 2 percent of Etsy, urged the Brooklyn-based company to explore a potential sale.
Etsy, which reported a net loss of $29 million last year, this month said it is laying off 80 people, roughly 8 percent of its workforce. It also appointed former eBay Inc <EBAY.O> executive Josh Silverman as chief executive, taking over from Chairman and CEO Chad Dickerson.
The average analyst recommendation for Etsy is between a "buy" and a "hold", according to Thomson Reuters data. The average analyst recommendation in May 2015 following Etsy's initial public offer was "hold".
The stock was up 23.6 percent at $13.99 in midday trade, its highest level since October. Etsy's IPO in April 2015 was priced at $16 per share. REUTERS