Yahoo Finance Etsy's DIY test for Wall Street
Etsy is gearing up for its Wall Street debut.
The online craft and vintage-good marketplace filed a prospectus for an IPO and could be trading on the NASDAQ as early as mid-April under the ticker ETSY. Etsy is seeking to raise more than $100 million dollars from the offering.
Etsy reported a $15 million loss on its $195.6 million in revenue last year. Yahoo Finance Senior Columnist Michael Santoli notes that this is just typical start up economics.
“They're not really trying to turn a profit just yet. It seems as if it's a really wide range of estimates as to what a company like this can deliver long term,” he says. “They're a gathering place for people with common interest and in theory a scalable platform.”
Santoli points out that small company IPOs are becoming increasingly rare.
“It's also interesting that a company at this stage is looking to do an IPO, because so many have not,” he says. “So many have stayed private and enjoyed new rounds of venture capital money.”
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Venture capital money is the cause of another tech bubble, says billionaire investor Mark Cuban. On his blog, Cuban points out that this bubble is different because the funding is coming from outside of the public markets.
Cuban thinks that Angel investments and crowdfunded equity are part of the problem, Santoli notes.
“It's worse because of how it's being done, as opposed to worse in the sense of being more pervasive, or more aggressive, or more speculative than the 2000 tech frenzy,” he says. “He has a criticism of this idea that companies are more reluctant to go public than they used to be… He says there's no liquidity. If things fall apart, they can't get out, you don't know what it's actually priced at.”
However, Santoli finds little credence to Cuban’s post.
“It's kind of a half warmed rant," he says. "It's not a very well fleshed out thesis, but it's definitely hitting on some of these cords that a lot of people have been tuned in to.”
