Why Etsy Stock Tanked Today
Shares of online marketplace Etsy (NASDAQ: ETSY) tanked on Thursday after the company reported financial results for the first quarter of 2021. Q1 results showed blistering growth, but management's guidance for the second quarter suggested things are cooling off. For this, the stock was down a painful 13% as of 10 a.m. EDT. And the stock is now down 35% from an all-time high reached earlier this year.
Q1 sales on Etsy's platform (known as gross merchandise sales, or GMS) were up an outstanding 132% from the first quarter of 2020. Of course, Etsy doesn't sell products directly. Rather, independent merchants use the platform to sell their handcrafted products and Etsy takes a cut -- the cut contributes to the company's revenue. Revenue for Etsy was up 142% year over year and, because it gains operating leverage with scale, net income was up an eye-popping 1,048% to $144 million.
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Source Fool.com
