Investment firms TPG, Dragoneer reveal stake in Etsy
Reuters
Investment firms TPGEtsy
The disclosure comes just weeks after activist hedge fund Black and White Capital LP, which owns roughly 2 percent of Etsy, urged the company to explore a potential sale. Etsy’s shares have fallen more than 30 percent since their initial public offering (IPO) two years ago.
Etsy shares jumped more than 8 percent in after-hours trading to $12.30.
TPG “has contacted representatives of Etsy to offer to engage in discussions regarding strategic alternatives,” it said in a filing with the U.S. Securities and Exchange Commission, where it disclosed a 4.3 percent stake. Dragoneer has a 3.7 percent stake.
“We are now reviewing our strategic and operational plans to ensure Etsy is focused on the most value-enhancing near- and long-term opportunities,” Etsy’s CEO Josh Silverman said in a statement in response to the filings on Monday.
Silverman, a former eBayWilson
Etsy was a darling of the artisanal set at the time of its IPO, but it has struggled as sales have slowed and new channels, such as Facebook Inc’s Instagram
Etsy, which reported a net loss of $421,000 this quarter, announced it is laying off 80 people, roughly 8 percent of its workforce, earlier this month.
It is not uncommon for private equity firms to do so-called “toehold investments” for reasons that include long-term investing and getting to know management. While such investments can sometimes morph into deals, as with Leonard Green & Partners
Dragoneer, an early stage investor in Etsy, has worked with TPG before, including its investment in music streaming service Spotify Ltd.
