Etsy (ETSY) Shares Up +88 Percent After Initial Public Offering
Shares of Etsy Inc. (ETSY) were down -1.00 or -3.33 percent to $29.00 per share in Friday's premarket after the stock soared +88 percent in its first day as a publicly traded company. The stock almost doubled its initial offering price of $16 per share in yesterday's regular trading session closing at $30 per share on its first day.
Launched in June of 2005, Etsy.com - owned by Etsy Inc. - is an e-commerce peer to peer website specializing in antique, vintage and handmade articles and supplies.
The Etsy website is set up like an open crafts fair, giving users personal storefronts where they can list their products for a fee of $0.20 per item. At the end of last year, Etsy had more than 54 million registered members with 19.8 million active buyers purchasing items from 1.4 million active sellers. The company had a net loss of -$15.2 million on revenue of $195.6 million in 2014 and has never posted a profit.
Etsy raised $267 million in its initial public offering yesterday, pricing shares at the high end of its range at $16 per share. The stock traded as high as $34 per share before selling off and settling at $30 per share by the close of the market. At $16 per share, Etsy's market cap was $1.78 billion, after yesterday's closing price of $30 per share, the company's value ballooned to more than $3 billion.
Etsy is a unique public company in that it is what is known as a "B corp company, which means it is certified by B Lab as a "public benefits corporation . According to B Lab, which has certified more than 1,000 firms, B corp companies are focused more on social and environmental concerns than on corporate profits and include companies like Method, Patagonia and Warby Parker.
Chad Dickerson, former Yahoo (YHOO) executive and Chief Executive Officer of Etsy said that, "Regardless of certification, we plan to focus on delivering a strong business that also generates social good . He also stated that, "The success of our business model is based on the success of our sellers. That means we don't have to make a choice between people and profit.
Etsy plans to use the $300,000 raised by the offering to fund Etsy.org, a non-profit website focused on teaching women and minorities to start their own businesses, setting aside stock for sellers and some of its larger customers. Time will tell if the company can maintain its status as a B corp and simultaneously keep investors happy as a publicly traded company.
Etsy stock is selling off in this morning's premarket, declining by -$1.00 per share, which is normal after yesterday's impressive run. The jury is still out on whether the company can maintain its B corp status, the company's current market valuation and high stock price without ever having shown a profit.
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