National / International News

Why Etsy's stock has fallen by half in two months

Marketplace - American Public Media - Wed, 2015-06-10 02:00

In just under a decade, Etsy has gone from a furniture maker's dream of an online crafts marketplace to a $3.3 billion publicly traded company to a company worth roughly half that. 

Wedbush analyst Gil Luria's explanation for the two-month slide in its stock price involves a cardboard box full of Etsy goods.

"I've bought my wife, you know, handmade jewelry. I've bought her hand-embroidered artwork. And most recently I've ordered a lot of counterfeit merchandise," says Gil Luria, analyst at Wedbush Securities.

He keeps them as evidence, to back up his claims that the company has been slow to crack down on counterfeit and copyright- and trademark-infringing goods. 

"I actually found it to be twenty times more likely that you'll find a counterfeit item on Etsy than on Alibaba or Ebay," he says.

His bearish assessment of Etsy is that its push for growth has meant allowing counterfeit, copyright-infringing as well as factory-made goods—all of which ultimately water down its homespun image.

That image is on full display at a "craft party" under the Manhattan Bridge in Brooklyn.

An Etsy event beneath the Manhattan Bridge in Brooklyn, NY. 

Tobin Low

"There's tinsel, there's balloons, there's lots of kids making crafts," says Cindy Peng, who sells jewelry as Cindy Penguin. 

At the next table, Tamara Garvey is even more gung-ho. "I love Etsy so much, I wouldn't sell at any other marketplace," she says.

Tamara Garvey sells her illustrations at an Etsy event in Brooklyn, NY.

Tobin Low

But what's next for Etsy depends on there being enough sellers like Peng and Garvey to make up for sellers like Sherry Truitt. She sold handmade cufflinks made out of vintage maps on Etsy for seven years, but quit when she says her wares started getting crowded out of the search results by factory-made versions.

"Now it looks like Ebay or Amazon. And some of the companies sell on all three," she says.

The question now is whether Etsy will be able to defend and grow its DIY niche in the face of competition from the likes of Amazon's forthcoming handmade marketplace. It's this speculation about the future, more than how many cuff links were sold today, that determines the company's stock price. 

"You say how can you justify that market cap based upon its current operations, and the answer is you can't," says Jay Ritter, professor of finance at the University of Florida.

If that makes this whole stock price question sound speculative, it should. Ritter says the way tech companies are valued on their future profitability is why the prices jump up and down so much. It's also why he says the last time a stock price fall like Etsy's was commonplace was during the Internet bubble of fifteen years ago.

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A snack bar smorgasbord

Marketplace - American Public Media - Wed, 2015-06-10 01:47
$200 million

That's how much Atlantic Broadband is paying to acquire regional telecom Metrocast Communications of Connecticut. Beyond the Time Warners and the T-Mobiles and the DirectTVs, plenty of smaller cable and satellite providers are going merge-crazy, often in a bid to become bigger and more efficient, though sometimes just because everyone else is doing it.

$12

That's how much Jack Ma, CEO of Chinese e-commerce site Alibaba, made per hour when he was an English teacher. With a $25 billion IPO, the company is certainly providing Ma with a significant bump in pay. But at a speech at the Economics Club of New York on Tuesday, Ma stated that he was much happier as a teacher, given the stress he currently faces as head of such a large company. As the South China Morning Post reports, Ma said, "If I had another life, I would keep my company private."

2

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7 years

That's how long Sherry Truitt sold her handmade cufflinks on Etsy before removing her business from the site. The reason? Truitt saw her products being crowded out of search results by factory-made products also sold on Etsy. As the company faces the reality of its stock dropping by nearly half in the last decade or so, Etsy sellers are questioning what happens next as the company opens the doors to larger manufacturers and as Amazon prepares to enter the handmade market.

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2019

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Court Decision On Texas Abortion Law Could Hasten Clinic Closures

NPR News - Wed, 2015-06-10 01:03

A federal appeals court has upheld sweeping abortion restrictions in Texas that supporters say protect women's health. Opponents say the decision could leave just seven or eight clinics open.

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Raising Graduation Rates With Questionable Quick Fixes

NPR News - Wed, 2015-06-10 01:02

The nation's high school graduation rate is at a record-high 81 percent. Why? Because states are doing good things ... or using some sleight of hand.

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For Bakers And Restaurants, Egg Supply Is Getting Ugly

NPR News - Wed, 2015-06-10 01:01

Commercial bakers and restaurants use liquid egg in dozens of foods, from cakes to mayonnaise. But the price has shot up 240 percent since May, as U.S. poultry farms reel from an avian flu outbreak.

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Businesses Are Hanging Up On Voice Mail To Dial In Productivity

NPR News - Wed, 2015-06-10 01:00

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