Etsy Stock Almost Doubled: $3.3 Billion Valuation For Unique Arts And Crafts Marketplace
Etsy stock almost doubled after its first day as a public company on the NASDAQ Thursday, according to BuzzFeed, closing out at $30 per share and a $3.3 billion valuation.
Trading under the ticker of ETSY on the NASDAQ, the arts, crafts, and handmade goods giant opened the day at $31 per share, which was well above its Initial Public Offering (IPO), priced at $16 per share Wednesday, according to CNN Money.
One of three corporations debuting on Wall Street Thursday, Etsy retained its momentum throughout the day, and surged to a close of $3.3 billion valuation, or $30 per share.
Led by Allen and Company, Goldman Sachs, and Morgan Stanley, the IPO raised $267 million Wednesday – $213 of which Etsy keeps, according to BuzzFeed, while investors will get the rest.
Etsy promised merchants they could buy up to 5 percent of Etsy stock, and that includes those who use the site, while $300,000 will go to Etsy.org to help promote “entrepreneurship for women in disadvantaged communities” according to Michigan Live.
Although Etsy reported a loss of $15.2 million in 2014 and has yet to make a profit, it has a good reason to look to the future, analysts say, with “room for revenue growth,” according to Michigan Live.
Celebrating its tenth year in business, Etsy and its founders Rob Kalin, Chris Maguire, and Haim Schoppik, created their signature online marketplace in 2005, which is headquartered in Brooklyn, NY.
Etsy specializes in arts and crafts – unique goods, according to Etsy – many of which are handmade goods sold by the average citizen, although antiques, specialty vintage and offbeat items are also available.
Different from other corporations on the NASDAQ in many ways, Etsy plans for the future, which starkly contrasts from what investors want – fast upfront profit and ever increasing stock prices, according to CNN Money.
Etsy is also different in how it is structured – it is a certified B Corporation via non-profit organization B Lab, and has been since May 2012, according to B Community. This means Etsy is a for-profit company with a strict mission to do environmental and social good – a position that has helped the company flourish online.
That Etsy is a B Corporation could have added to its stock price and valuation price. Etsy’s valuation is well above what anyone expected, even from just four weeks ago when Etsy filed its IPO at $100 million, according to Venture Beat. The magazine said Etsy was “headed for the big times,” with that filing.
While a $100 million IPO is nothing to scoff at – Shopify just filed for a $100 million IPO two days ago – the Facebook IPO closed its first day at a $106 billion valuation after opening at $38 per share in May 2012, according to Time, and Facebook stocks are trading now at $82.31 as of the last closing bell.
According to the New York Times, Etsy Chief Executive Officer Chad Dickerson said that Etsy stock and successful IPO was an “important milestone.” Attributing the success of Etsy’s business model to how successful sellers are, Dickerson said, “We don’t have to make a choice between people and profit.”
That sales jumped 56 percent in the last year and that the Etsy stock doubled in a single day appears to be a testament to that success.
Do you have an Etsy shop? If so, how do you think the IPO will affect you?
[Photo Credit: Spencer Platt/Getty Images, Etsy Press Library, NASDAQ]
