Etsy stock is down 48% over the past 12 months.
Gabby Jones/Bloomberg
Etsy
shares spiked more than 8% after the online handicrafts marketplace said that Marc Steinberg, a partner from the activist investment group Elliott Management will join the company’s board effective Feb. 5.
Elliott has accumulated a 13% economic interest in Etsy in the form of stock and options, which makes them the company’s largest holders, according to a person familiar with the situation. Steinberg said in a statement that he sees “an opportunity for significant value creation.”
“Marc brings unique and valuable experience as an investor and board member in the technology, digital media, and e-commerce industries,” Etsy CEO Josh Silverman said in a statement. “We’ve gotten to know Marc, and appreciate his passion for Etsy’s mission and excitement about the future growth opportunities for all of our stakeholders.”
Steinberg also sits on the
Pinterest
board, where he joined as a director in December 2022. Pinterest shares have since doubled.
Etsy shares soared during the Covid-19 pandemic, but have struggled since. The stock is down 48% over the past 12 months. In December, the company announced a restructuring planning that included an 11% workforce reduction.
“While the Etsy marketplace is still more than double the size it was in 2019, we need to acknowledge and adjust for today’s realities,” Silverman said in announcing the job cuts. “We are operating in a very challenging macro and competitive environment, and GMS [gross merchandise sales] has remained essentially flat since 2021. This means we are not bringing our sellers more sales, which is the single most important thing we can do for them.”
At the same time, he said, employee expenses have grown, even as the company has cut costs and adjusted hiring. “This is ultimately not a sustainable trajectory and we must change it,”
Etsy’s fourth-quarter financial guidance calls for gross merchandise sales to be down from a year earlier by a percentage in the low single digits.
Write to Eric J. Savitz at eric.savitz@barrons.com
