Etsy, an online craft marketplace that brings together buyers and sellers of handmade clothes, art, crafts and other one-of-a-kind products, has some loyal entrepreneurs on edge as the website tries to find its place on Wall Street following a public stock offering.
It began life as a public company on Thursday with a bang, reported CNNMoney. Etsy shares closed at $30 a share, a whopping 88 percent surge from its initial public offering price.
Etsy is now worth $3.3 billion as a company, according to the CNN report.
The reason why indie craftsmen should worry about Etsys success is because now it is no longer beholden to just the community that grew the company but to shareholders as well.
As Etsys stock goes up and down, so many of the companys loyalties will shift from sellers to shareholders.
A day after investors welcomed the online marketplace for arts and crafts as a publicly traded company, by sending the stock up 88 percent, the shares tumbled as much as 12 percent intraday Friday before paring some losses in afternoon trading, following a downbeat research note from Wedbush Securities, reported MarketWatch.
Etsy closed down at $27.18 a share the day after it went public, and as a publicly traded company, its job is get that stock to grow.
Wall Street has questions about Etsys ability to succeed as a publicly traded company because of its close ties to its community of merchants, reported VentureBeat. For example, the company set aside as much as 5 percent of the 16.7 million shares on offer for its community members, though the exact figure of shares given to retailers isnt known. Some investors have wondered whether the company will be able to keep its eye on the bottom line in spite of its relationship with its merchants.
Another problem Etsy has is that according to its current guidelines, products cannot be mass-produced. Every merchant on Etsy must sell either handmade or vintage products. Craft supplies can be sold on Etsy as well, but reselling items is not allowed.
Guidelines such as these do not allow for easy growth, but if Etsy were to change this guideline, it could hurt its growth by angering a lot of its merchants.
For many of its fans, Etsy is much more than a marketplace., reported the New York Times. They view it as an antidote to global mass production and consumption, and a stand against corporate branding. Its their vote for authenticity and good old craftsmanship, and a seemingly ethical alternative to buying from big corporations. And it has helped spur a wider industry of items, from bedsheets to beef jerky, that claim to be homespun, artisanal or otherwise handmade.
Turning away from this maker-ethos might cause its sellers to look elsewhere for the community they originally enjoyed with Etsy.
Investors and merchants will be looking to Etsy to see how the company decides to navigate this tension between inventors who want to see profitable returns and those who want Etsy to ensure its loyal following of small-scale merchants earn a profit.
It began life as a public company on Thursday with a bang, reported CNNMoney. Etsy shares closed at $30 a share, a whopping 88 percent surge from its initial public offering price.
Etsy is now worth $3.3 billion as a company, according to the CNN report.
The reason why indie craftsmen should worry about Etsys success is because now it is no longer beholden to just the community that grew the company but to shareholders as well.
As Etsys stock goes up and down, so many of the companys loyalties will shift from sellers to shareholders.
A day after investors welcomed the online marketplace for arts and crafts as a publicly traded company, by sending the stock up 88 percent, the shares tumbled as much as 12 percent intraday Friday before paring some losses in afternoon trading, following a downbeat research note from Wedbush Securities, reported MarketWatch.
Etsy closed down at $27.18 a share the day after it went public, and as a publicly traded company, its job is get that stock to grow.
Wall Street has questions about Etsys ability to succeed as a publicly traded company because of its close ties to its community of merchants, reported VentureBeat. For example, the company set aside as much as 5 percent of the 16.7 million shares on offer for its community members, though the exact figure of shares given to retailers isnt known. Some investors have wondered whether the company will be able to keep its eye on the bottom line in spite of its relationship with its merchants.
Another problem Etsy has is that according to its current guidelines, products cannot be mass-produced. Every merchant on Etsy must sell either handmade or vintage products. Craft supplies can be sold on Etsy as well, but reselling items is not allowed.
Guidelines such as these do not allow for easy growth, but if Etsy were to change this guideline, it could hurt its growth by angering a lot of its merchants.
For many of its fans, Etsy is much more than a marketplace., reported the New York Times. They view it as an antidote to global mass production and consumption, and a stand against corporate branding. Its their vote for authenticity and good old craftsmanship, and a seemingly ethical alternative to buying from big corporations. And it has helped spur a wider industry of items, from bedsheets to beef jerky, that claim to be homespun, artisanal or otherwise handmade.
Turning away from this maker-ethos might cause its sellers to look elsewhere for the community they originally enjoyed with Etsy.
Investors and merchants will be looking to Etsy to see how the company decides to navigate this tension between inventors who want to see profitable returns and those who want Etsy to ensure its loyal following of small-scale merchants earn a profit.