Topic: How To Invest

Q: Hi, Pat. I would appreciate your thoughts on Etsy? Seems like an interesting business but at some risk of being dominated by Amazon. Is it worth an investment? Potential buyout target for Amazon? Thanks.

Article Excerpt

A: Etsy Inc., $50.00, symbol ETSY on Nasdaq (Shares outstanding: 120.2 million; Market cap: $6.1 billion; www.etsy.com), provides an online marketplace for buyers and sellers of unique and creative goods. The company was founded in 2005 and is headquartered in Brooklyn, New York. The platform generates revenue primarily from listing fees of $0.20 per item and a final value sales fee of 5%. A small but growing revenue stream comes from fees for extra services such as promoted listings, payment processing, and shipping labels. Etsy first sold shares to the public in an IPO on April 16, 2015, at $16 per share. The shares hit an all-time high of $73.45 in March 2019. Since then the value of Etsy stock has dropped almost 31%. In July 2019, the company acquired Reverb.com, a marketplace for buying and selling new, used and vintage music gear, for $275 million. Reverb.com has a complementary product line and brand presence that should benefit from Etsy’s superior platform selling…

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