Elliott Management Targets Etsy, Becoming Its Largest Investor

Elliott Management, a renowned investment firm with a history of active governance tactics, has recently become a major player in the world of Etsy. By acquiring a combination of shares and options, Elliott now holds a 13% stake in the company. This positions them as the largest investor, just behind Vanguard, which owns 11%, and BlackRock, holding 5%.

Adding to their influence, Elliott has secured a spot on Etsy's board with the appointment of Marc Steinberg, a partner at the firm, effective February 5. Steinberg has shared his positive outlook on Etsy's unique place in e-commerce and expressed a commitment to value creation, suggesting the potential for major strategic changes.

Historically, Elliott Management, with assets amounting to around $59 billion as of mid-2023, takes an assertive approach with companies it deems undervalued. The firm's past includes restructuring early tech entities like Enron and WorldCom. More recently, it has turned its attention to the technology sector, influencing companies like Twitter, Pinterest, and Salesforce through substantial investments and strategic interventions.

Etsy's recent performance has been troubled, marked by significant layoffs at the end of last year. Facing fierce competition from low-cost Chinese retailers and battling issues with product quality and marketplace integrity, Etsy has seen its marketing costs soar. Despite this, the online retailer, famed for its array of artisanal and handmade goods, has endeavored to expand its business reach through acquisitions, with varied success.

With the forecast for Etsy's gross merchandise sales showing a slight decline and revenue growth modest at best, Elliott Management's entry — known for its cost-reduction strategies — has led to a noticeable uptick in the company's stock price. Etsy's leadership is likely to face new pressure and directives aimed at driving growth and value for investors.

Etsy, Elliott, Investment