Can an IPO of the online marketplace for handcrafted items make a splash on Wall Street?
Etsy, the company that connects you to the makers and sellers of red felted cat beds and millions of other handcrafted items, may soon let you buy a piece of itself.
Etsy filed an S-1 form with the Securities and Exchange Commission to raise $100 million through an initial public offering (IPO) of company stock, which would be traded on the Nasdaq Global Select Market under the symbol ETSY.
Before jumping in, you may want to consider if you can make as much from Etsy stock as you can from selling your goods in its marketplace.
“We have a history of operating losses, and we may not achieve or maintain profitability in the future,” the Brooklyn-based company cautions in its filing.
Founded in 2005, Etsy says that by December 2014 it had 54 million members, 1.4 million active sellers and 19.8 million active buyers who generated $1.93 billion of general merchandise sales. Of that total, 36.1 percent came from purchases made on mobile devices and 30.9 percent came from Etsy sellers or buyers outside of the United States.
The stock price hasn’t been determined, but Morgan Stanley will administer the Etsy offering program for individual investors. “Participation in the program will be capped based on the final price of the offering (approximately $2,500 per participant),” the investment bank said in a statement.
Etsy bills itself as a technology-based platform where even the code that runs it is a craft.
It emphasizes its certification by B Lab, an independent nonprofit organization, as a B Corporation, using “the power of business to solve social and environmental problems.”
Despite its lack of profit, Etsy says it is building for the long term.
“We want to build a company that lasts, and we plan to measure our success in years and decades. Etsy sellers in particular depend on us and on our platform to grow their businesses, so we will strive to make decisions that are best for the long-term health of our ecosystem.”
Chad Dickerson, Etsy CEO, said in a blog post announcing the IPO that he could not say more than what is in the filing.
“SEC rules require a ‘quiet period’ around IPOs, meaning we are limited in what we can say on the topic, even to Etsy employees and the Etsy community,” he wrote. “Most of the time, we’ll have to say ‘no comment’ to your questions, and I understand that may not be satisfying.”