3 Pressures for Etsy Act as a Trifecta of Gloom

Companies and Brands

Published: October 12, 2015 2:45 pm

Last Updated: October 13, 2015 6:38 am

Etsy Inc. (NASDAQ: ETSY) is a well-run company, with a great outlet for those who make crafts and hand-made goods, that simplifies tasks for many people who create things. Unfortunately, it has three serious problems. Some of those problems have been known and might be in the share price already.

Amazon.com Inc. (NASDAQ: AMZN) has been a thorn in Etsy’s side. Amazon was always a potential threat, but it now it has formally launched the Handmade service on the Amazon retail network.

Amazon said that Handmade at Amazon is its new store on Amazon.com for invited artisans to sell their handcrafted goods. It allows for an Artisan Profile page, and gives craft-makers the ability to have product pages and e-commerce sales. Despite an initial public offering from Etsy, Jeff Bezos and Amazon are generally considered more than formidable when it comes to competing for business.

Another issue facing Etsy is a lock-up expiration that is taking place this week. Almost 56 million shares of Etsy’s common stock are being made available for sale. Some 22 million or so of those shares are held by officers, directors and large holders of the stock.

The only good news for Etsy and other post-IPOs is that there is rarely an all-out exodus from the stock. That being said, Etsy shares have been gutted since its IPO with a loss of about half.

The third issue impacting Etsy is a trend of negative analyst calls. The boutique firm Monness Crespi & Hardt initiated analyst coverage on Etsy with a dismal “Sell” rating on Monday. The firm also issued a downside price target of $10.00.

At the end of September, Wedbush Securities maintained its “Underperform” rating, a “Sell” equivalent call elsewhere, with an even less-appealing $9.00 price target.

All of this is not exactly the trifecta that Etsy’s shareholders would want to deal with in a very short period of a few days. Etsy shares were down 7.7% at $12.79 in mid-day trading on Monday. The stock’s consensus analyst price target is closer to $16.00 and its 52-week range is $11.85 to $37.74.

The only good news here is that the Etsy short interest has actually shrunk. Etsy had some 8.09 million shares listed in its short interest as of September 30, down from a peak of more than 10.5 million shares in mid-July.

100 Million Americans Are Missing This Crucial Retirement Tool

The thought of burdening your family with a financial disaster is most Americans’ nightmare. However, recent studies show that over 100 million Americans still don’t have proper life insurance in the event they pass away.

Life insurance can bring peace of mind – ensuring your loved ones are safeguarded against unforeseen expenses and debts. With premiums often lower than expected and a variety of plans tailored to different life stages and health conditions, securing a policy is more accessible than ever.

A quick, no-obligation quote can provide valuable insight into what’s available and what might best suit your family’s needs. Life insurance is a simple step you can take today to help secure peace of mind for your loved ones tomorrow.

Click here to learn how to get a quote in just a few minutes.