I’m not in the share market game anymore as I’ve moved on to digital assets but I wanted to share some insights I have to see if there’s an opportunity to short Etsy.
My contact has had 2 Etsy stores for over 2.5 years and averaged sales of over $25k a month over that period of time. (US sales only)
Now I understand covid and stimi cheques have muddied the waters in analysing any data over the last 3 years but her sales have dropped off the end of a cliff in the last 4 weeks.
There are obvious reasons as to why this is the case.
- High gas prices reducing people’s disposable incomes
- Inflation further reducing people’s disposable incomes
- Fear – Ukraine / Russian war
- Higher Interest rates reducing people’s disposable incomes
- Post Xmas – Jan / Feb / March being slower months in terms of sales volumes
Her sales have gone from $25k to $3k a month and there is no clear sign they are going to pick up.
Given that a lot of revenue Etsy generates is through clipping the ticket on sales surely their top-line revenue is going to tank in Q2 ( April – June ) ?
Now this could already be baked into their current value but I’m just putting this here to see what others think of the above.
Disclaimer: This information is only for educational purposes. Do not make any investment decisions based on the information in this article. Do you own due diligence or consult your financial professional before making any investment decision.