Etsy Welcomes New Board Member and Seeks Growth Opportunities
Etsy, the popular online handicrafts marketplace, experienced a surge in its shares, increasing by over 8% following the announcement that Marc Steinberg, a partner from activist investment group Elliott Management, will join the company's board. With an economic interest of 13% in Etsy through stock and options, Elliott Management now holds the largest stake in the company. Steinberg expressed his excitement about the opportunity for significant value creation.
Etsy CEO Josh Silverman praised Steinberg's expertise as an investor and board member in the technology, digital media, and e-commerce sectors. Silverman acknowledged Steinberg's passion for Etsy's mission and enthusiasm regarding future growth opportunities for all stakeholders.
Steinberg also serves on the board of Pinterest, where he became a director in December 2022. Since his appointment, Pinterest shares have doubled in value.
While Etsy experienced soaring shares during the Covid-19 pandemic, the company has faced challenges in recent times. Over the past year, Etsy's stock has fallen by 48%. To address this, the company announced a restructuring plan in December, which included an 11% reduction in its workforce.
Acknowledging the current realities of operating in a challenging macro and competitive environment, Silverman emphasized the importance of bringing more sales to sellers. Despite the Etsy marketplace being more than double its size in 2019, gross merchandise sales (GMS) have remained essentially flat since 2021. Employee expenses have continued to grow, leading to an unsustainable trajectory that necessitates change.
Etsy's fourth-quarter financial guidance anticipates a decrease in gross merchandise sales compared to the previous year by a percentage in the low single digits.
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