The top execs at Etsy marked its first day as a public company in the most Etsy way possible: by ringing a set of "handmade and vintage bells."
Etsy, a decade old online marketplace for handcrafted goods, began trading on the Nasdaq Thursday, opening at $31 per share, nearly doubling from its IPO price, suggesting much stronger-than-expected demand for the business. It now has a market cap of nearly $4 billion -- enough to buy almost 15,000 of these strangely expensive colorful ceramic pots on Etsy.
The Brooklyn-based company announced late Thursday that it had priced its IPO at $16 a share, at the high-end of its previously proposed price range, raising $267 million from the public offering.
.@Etsy rings the @Nasdaq Opening Bell in celebration of #IPO! #sellerbration $ETSY pic.twitter.com/inpQYRSl8h— Nasdaq (@NASDAQ) April 16, 2015
In an unusual move, Etsy specifically targeted smaller investors and also made a portion of its shares available for its many vendors to buy ahead of the IPO. In that way, it may be trying to maintain some of its independent credibility even as it emerges as a multi-billion-dollar technology corporation.
The Etsy IPO is also notable for being the largest ever for a B-corporation, a certification for socially and environmentally responsible businesses. It's also a notable exit for B-town (Brooklyn).
1) ETSY is a billion-dollar tech IPO for a Brooklyn company. Imagine how strange that sentence would have seemed twenty years ago.— Steven Johnson (@stevenbjohnson) April 16, 2015
Before Etsy even began trading, one ratings firm criticized its "weak profitability" and characterized it as little more than an acquisition target.
"Etsy is popular with buyers and sellers, and it has a first-mover advantage in its niche. But that's not necessarily a defendable competitive position," said James Gellert, CEO of Rapid Ratings. "It looks more like an acquisition target than a company that will grow really large over time."
Gil Luria, an analyst with Wedbush, was a bit more positive about the company. "We expect Easy to enjoy rapid near-term growth rates within its niche as marketing spend helps drive penetration," he wrote in his first investor note on the company. "However, we believe some seller practices may draw scrutiny, eventually limiting volume growth." For that reason, he currently has a neutral rather than a buy rating on the stock.
Etsy generated $200 million in revenue for 2014, but posted a net loss of $15.2 million, up from a net loss of less than $1 million a year earlier.
For those customers and sellers who have enjoyed Etsy's quirky craft marketplace and independent spirit, there is also the question that comes with every IPO: how much will going public change the company?
"Let's cherish the memory of Etsy as it was on its last day as a nonpublic company: A website for people who sell handmade crafts that has vowed not to let greed get in the way of doing good," Katie Benner, a columnist for Bloomberg View, wrote this week. "It seems unlikely that we will still be able to describe Etsy that way five years from now."
You can take the Etsy out of Brooklyn, but that may mean taking the Brooklyn out of Etsy.
It wasn't just Etsy's day to shine, though. Party City, the party supply chain, also went public on Thursday in what looked to be a raucous affair. Virtu, a high-frequency trading firm, also had its IPO.
Leave it to @PartyCity to get the party started this early pic.twitter.com/VG2wTD82uk— NYSE (@nyse) April 16, 2015