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Shakeup in Etsy Senior Management After Miss in Earnings

In a bit of a surprise during the earning report, Etsy announced senior management changes including the ouster of CEO Chad Dickerson. Chad Dickerson will also step down as Chair of the Board of Directors.

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Etsy’s Board of Directors appointed Josh Silverman, a director on the board since November 2016, to the post of CEO effective Wednesday, May 3, 2017.

Josh Silverman brings a wealth of experience to the role of CEO. Most notably, he served as President of Consumer Products and Services at American Express, CEO of Skype, and held various executive positions at eBay.

Along with Dickerson, the company announced John Allspaw, CTO, will be leaving the Company as well. Mike Brittain, VP of Engineering, is the new interim CTO.


Bloomberg reports Hedge fund Black-and-White Capital LP is pushing Etsy to make operational changes. The ousting of senior management appears to be just the beginning.

Etsy also announced they are slashing their workforce 8% by laying off 80 employees.

Black-and-White owns about 2% of all shares and is now publically criticizing the company after months of private talks. Among its chief complaints are:

  • Etsy is “bloated” and needs to re-accelerate revenue growth and reduce operating costs.
  • The search functionality within Etsy is “horrendous, ” and the company needs to invest R&D in this area better.
  • Most of Etsy’s IT infrastructure should move to the public cloud.
  • The company needs to improve product categorization.


The battle lines are drawn between the social values of Etsy, which includes a B-Corporation certification status, and hedge fund shareholder interests. As a B-Corporation, the firm pays its workers about 40% above the local living wage and covers most of the employee’s health insurance premiums.

Activist investors are more interested in boosting shareholder value.

Black-and-White stated they believe the company is underperforming. They suggested the company should look for strategic alternatives or consider a sale.

Etsy shares fell below $10 a share Tuesday evening in after-hours trading. The hedge fund believes the company could have an immediate acquisition value of $15.50 per share with an intrinsic value of $30 per share on improvements.


In simple terms, Etsy missed. While the company improved revenues to $96.9 million versus the same quarter last year of $81.85 million, it lost $421.000 in the first quarter 2017.

In Q1 2016, Etsy had a net income of $1.2 million. Analysts surveyed by FactSet expected per-share earnings of 1 cent on revenues of $98.4 million.


It improved checkout speed with Android Pay and now offers guest checkout. The marketplace also added a buy-it-now option for listings.

There have been other platform improvements this year. However, none that addressed the concern by Black-and-White Capital LP about its search function.

Moreover, the company was instrumental in launching the first-ever Microbusiness Caucus on Capitol Hill. Etsy also received Living Building Challenge Petal and LBC certifications for its green HQ initiatives.

As a public company, shareholder pressure will eventually catch up with lagging financials. The new CEO Josh Silverman will have his hands full to fix the fiscal ship of Etsy.

There is no doubt this will not be the last major news about Etsy for 2017. It is unlikely to be about social and environmental issues and more about finances and platform improvements.

What do you think about this change at Etsy?

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