Etsy IPO Explained

The online marketplace that proves homespun and handmade products can become big business is about to join the ranks of public companies. The Brooklyn-based company will start trading on the Nasdaq stock exchange under the ticker symbol ETSY. It’s expected to price Wednesday and open for trading Thursday. Go here

When companies go public they work with investment banks who help them assess their value and handle the sale of their first shares to investors. Investment banks typically keep a portion of the sales to cover their fees. Etsy is working with Goldman Sachs and Morgan Stanley.

One Thing About Bitcoin – Day 320: Key Insights for Crypto Enthusiasts

Most of the shares in an IPO go to major investors like large asset managers. But Etsy plans to set aside 5 percent of the initial offerings for vendors and other small investors, including sellers who craft their wares on the website. This is a rare move for an IPO and extends the folksy image that the company carefully crafted in its 10-year history.

While the artisan culture that helped Etsy get started is still a key part of its brand, it’s also a major obstacle to profitability. The company has warned investors in its IPO filing that it may never be profitable.

The company has made several efforts to boost revenue in its decade of being a public company. These include partnering with retailers and sponsoring tradeshows. But these moves could further dilute the company’s indie image and possibly alienate some of its most loyal customers. It will also be challenging for Etsy to balance its commitment to the community with its desire to grow the business.