5 ms·

To be clear, it's lost XX% of it's market cap. The market cap is a knowingly-flawed assessment of earnings potential for a company. Its actual value is probably

by sulam 11y ago

To be clear, it's lost XX% of it's market cap. The market cap is a knowingly-flawed assessment of earnings potential for a company. Its actual value is probably unchanged.

rail2rail 11y ago
The value of Etsy changed when Amazon entered its space. It is objectively worth less now that the 800 lb gorilla has decided to eat Etsy's lunch.
- adventured 11y ago
  Amazon fails to eat other companies lunch more often than it succeeds in fact. See: search, auctions, classified ads, smart phones, etc.
- paulcole 11y ago
  I don't think this has much to do with it. Amazon's attempt was really half-assed (classic Amazon, to be honest). The only mention of Handmade on the Amazon homepage is in the "Search by Category" dropdown. The real issue in my opinion is that Etsy discovered that they couldn't keep growing without opening their doors to cheap non-handmade shit. Which they've done. And their search/discoverability is absolutely awful. My partner lists her truly handmade products on Etsy but only as an afterthought. As the amount of garbage on Etsy has increased, her views/sales have dropped. She has put all of her effort into getting sales through her own website, where at least she's in control.
  - tootie 11y ago
    I think the ones who really ate their lunch were companies like Shopify.
    - keepyourdayjob 11y ago
      Speaking with some knowledge of the company, it boggles the mind a little that they failed to snap up Shopify (or more likely one of that company's scrappier competitors) when Etsy got like $27M in 2008. Every single time Etsy didn't help a seller set up their own e-commerce site, someone else did, and this happened hundreds of thousands of times. And is still happening. But Etsy struggled with leadership and technical problems in those days that were really serious, and not easily solved.
      - tedmiston 11y ago
        But in the early days many Etsy sellers didn't have their own e-commerce sites. A lot of them didn't even have websites outside of Etsy, often just a Facebook page. I'm not sure that's changed much.
        keepyourdayjob 11y ago
        You're mistaken. Etsy was for many people their first steps at e-commerce, but every seller who made sales on Etsy has asked themselves "What about all the people not on Etsy? How do I reach them?". In 2005 Etsy's advantage was that creating your own standalone shop was hard, expensive, and ineffective. They shuffled CEO's while Shopify, BigCartel, WooCommerce, BigCommerce, and many others solved those problems. And Kickstarter proved you could make a lot of money without losing your cool indie cred. There has always been a disconnect between what Etsy wanted to be (and there have been multiple versions of that) and what it's sellers (who are its customers) wanted. That grew into a chasm so big that Amazon saw light shining through it.
        tedmiston 11y ago
        It would be interesting to see data to support whether this hypothesis holds up. I have two gut feelings: 1. Hobbyist Etsy sellers don't dedicate the time and/or lack the business savvy to be running additional sales channels outside of Etsy. Additionally, even setting up a Shopify, etc. store requires some technical ability that you or I take for granted. 2. Semi-professional Etsy sellers, for example, those coming from operating eBay or Amazon Stores, were already using their other channels before Etsy. So they were sophisticated enough that it was cheap/easy to have someone whip up an osCommerce + PayPal site for them. I did this personally for a few clients already successfully selling on forums between 2005-2008.
- SixSigma 11y ago
  IPO $16 Peak $34 in May down to $14 in July bounced but back to $14 in August flat till October when Amazon entered now down to $7 Jeff Reeves at InvestorPlace [1] caled it "the biggest joke on Wall Street in May" [1] http://investorplace.com/2015/05/etsy-stock/ http://investorplace.com/2015/05/etsy-stock/
tyre 11y ago
Market cap is just value of a single share * number of shares outstanding. Do you have a better way of valuing a publicly-traded company? When you say "its actual value is probably unchanged", what value are you talking about? If you think there is a disconnect between share price and value (however you're measuring that), then it is an excellent opportunity to arbitrage an inefficient market.
- sulam 11y ago
  I _know_ there's a disconnect between the share price and the value, I just don't know what direction it's going to go in. This is why straddles are so much fun. :) The efficiency of markets is widely overrated.
  - radicaldreamer 11y ago
    It's super annoying when there's a strong and confident initial comment and the clarifying comment is jibber jabber.
    - bcbrown 11y ago
      http://www.investopedia.com/terms/s/straddle.asp http://www.investopedia.com/terms/s/straddle.asp
      - radicaldreamer 11y ago
        Yes, I know what a straddle is, but it has almost nothing to do with the initial claim: "Its actual value is probably unchanged."
  - vonklaus 11y ago
    I agree with you, and something I am actively working on. That said, anecdotally, the market seems to overvalue many things a medium amount, and greatly undervalue a small few things by an order of magnitude. So while I would say, sure, the market cap of a company, in what could pitentially br another downturn, is not exactly precision science, this company is in bad shape. Huge successful direct conpetitor: pinterest. Massive successful competitors generally like the amazon, the entire internet, and most flea markets and shops. Negative trending community; shrinking Not profitable Publicly traded. also, on a final point. Even when markets are wrong, which I dont think is the case here,they can become correct by driving the company the direction they expect it to go. So on balance, you're correct. Specifically, I wouldn't buy their stock.
stevewilhelm 11y ago
Revenue growth flat and loosing money for the last four quarters doesn't seem to good. https://www.google.com/finance?q=NASDAQ%3AETSY&fstype=ii&ei=tGaZVsGfNMjIigLSorWoAQ https://www.google.com/finance?q=NASDAQ%3AETSY&fstype=ii&ei=...
draw_down 11y ago
Oh my god, seriously?!

by sulam 11y ago

To be clear, it's lost XX% of it's market cap. The market cap is a knowingly-flawed assessment of earnings potential for a company. Its actual value is probably unchanged.

rail2rail 11y ago

The value of Etsy changed when Amazon entered its space. It is objectively worth less now that the 800 lb gorilla has decided to eat Etsy's lunch.

adventured 11y ago
Amazon fails to eat other companies lunch more often than it succeeds in fact. See: search, auctions, classified ads, smart phones, etc.
paulcole 11y ago
I don't think this has much to do with it. Amazon's attempt was really half-assed (classic Amazon, to be honest). The only mention of Handmade on the Amazon homepage is in the "Search by Category" dropdown. The real issue in my opinion is that Etsy discovered that they couldn't keep growing without opening their doors to cheap non-handmade shit. Which they've done. And their search/discoverability is absolutely awful. My partner lists her truly handmade products on Etsy but only as an afterthought. As the amount of garbage on Etsy has increased, her views/sales have dropped. She has put all of her effort into getting sales through her own website, where at least she's in control.
- tootie 11y ago
  I think the ones who really ate their lunch were companies like Shopify.
  - keepyourdayjob 11y ago
    Speaking with some knowledge of the company, it boggles the mind a little that they failed to snap up Shopify (or more likely one of that company's scrappier competitors) when Etsy got like $27M in 2008. Every single time Etsy didn't help a seller set up their own e-commerce site, someone else did, and this happened hundreds of thousands of times. And is still happening. But Etsy struggled with leadership and technical problems in those days that were really serious, and not easily solved.
    - tedmiston 11y ago
      But in the early days many Etsy sellers didn't have their own e-commerce sites. A lot of them didn't even have websites outside of Etsy, often just a Facebook page. I'm not sure that's changed much.
      - keepyourdayjob 11y ago
        You're mistaken. Etsy was for many people their first steps at e-commerce, but every seller who made sales on Etsy has asked themselves "What about all the people not on Etsy? How do I reach them?". In 2005 Etsy's advantage was that creating your own standalone shop was hard, expensive, and ineffective. They shuffled CEO's while Shopify, BigCartel, WooCommerce, BigCommerce, and many others solved those problems. And Kickstarter proved you could make a lot of money without losing your cool indie cred. There has always been a disconnect between what Etsy wanted to be (and there have been multiple versions of that) and what it's sellers (who are its customers) wanted. That grew into a chasm so big that Amazon saw light shining through it.
        tedmiston 11y ago
        It would be interesting to see data to support whether this hypothesis holds up. I have two gut feelings: 1. Hobbyist Etsy sellers don't dedicate the time and/or lack the business savvy to be running additional sales channels outside of Etsy. Additionally, even setting up a Shopify, etc. store requires some technical ability that you or I take for granted. 2. Semi-professional Etsy sellers, for example, those coming from operating eBay or Amazon Stores, were already using their other channels before Etsy. So they were sophisticated enough that it was cheap/easy to have someone whip up an osCommerce + PayPal site for them. I did this personally for a few clients already successfully selling on forums between 2005-2008.
SixSigma 11y ago
IPO $16 Peak $34 in May down to $14 in July bounced but back to $14 in August flat till October when Amazon entered now down to $7 Jeff Reeves at InvestorPlace [1] caled it "the biggest joke on Wall Street in May" [1] http://investorplace.com/2015/05/etsy-stock/ http://investorplace.com/2015/05/etsy-stock/

tyre 11y ago

Market cap is just value of a single share * number of shares outstanding. Do you have a better way of valuing a publicly-traded company? When you say "its actual value is probably unchanged", what value are you talking about? If you think there is a disconnect between share price and value (however you're measuring that), then it is an excellent opportunity to arbitrage an inefficient market.

sulam 11y ago
I _know_ there's a disconnect between the share price and the value, I just don't know what direction it's going to go in. This is why straddles are so much fun. :) The efficiency of markets is widely overrated.
- radicaldreamer 11y ago
  It's super annoying when there's a strong and confident initial comment and the clarifying comment is jibber jabber.
  - bcbrown 11y ago
    http://www.investopedia.com/terms/s/straddle.asp http://www.investopedia.com/terms/s/straddle.asp
    - radicaldreamer 11y ago
      Yes, I know what a straddle is, but it has almost nothing to do with the initial claim: "Its actual value is probably unchanged."
- vonklaus 11y ago
  I agree with you, and something I am actively working on. That said, anecdotally, the market seems to overvalue many things a medium amount, and greatly undervalue a small few things by an order of magnitude. So while I would say, sure, the market cap of a company, in what could pitentially br another downturn, is not exactly precision science, this company is in bad shape. Huge successful direct conpetitor: pinterest. Massive successful competitors generally like the amazon, the entire internet, and most flea markets and shops. Negative trending community; shrinking Not profitable Publicly traded. also, on a final point. Even when markets are wrong, which I dont think is the case here,they can become correct by driving the company the direction they expect it to go. So on balance, you're correct. Specifically, I wouldn't buy their stock.

stevewilhelm 11y ago

Revenue growth flat and loosing money for the last four quarters doesn't seem to good. https://www.google.com/finance?q=NASDAQ%3AETSY&fstype=ii&ei=tGaZVsGfNMjIigLSorWoAQ https://www.google.com/finance?q=NASDAQ%3AETSY&fstype=ii&ei=...

draw_down 11y ago

Oh my god, seriously?!