It's miraculously taken more than two years for someone to realize that Etsy is a totemic example of a public company subconsciously calling out in the darkness of its own confusion for the sweet release of shareholder activism.
But it appears that someone has finally decided to sack up and take a shot at saving Etsy from itself...
Etsy Inc. is being targeted by hedge fund Black-and-White Capital LP, which is urging the online marketplace for hand-made goods to explore strategic alternatives, including a possible sale, as it undertakes various operational and governance improvements.
Black-and-White, which says it owns about 2 percent of Etsy, is publicly releasing its proposals and criticisms after months of private talks, according to correspondence obtained by Bloomberg. The firm highlighted Etsy’s need to re-accelerate revenue growth and reduce bloated operating costs, the letter shows.
Essentially, a brand-new fund has taken just enough of a position in Etsy to make a name for itself by demanding that Etsy behave like a real, grown-up company. Judging from Black-and-White's demands, it seems that Etsy might soon be forced to decide once and for all what it, like, actually is...
“The company’s historical pattern of ill-advised spending has completely obfuscated the extremely attractive underlying marketplace business model,” Black-and-White wrote. “We are fully prepared to take any actions we believe are necessary to protect the best interests of all Etsy shareholders.”
Unlike many of Etsy's biggest shareholders, Black-and-White didn't participate in Etsy's artisanal IPO that somehow mixed Goldman Sachs with B Corp status and a roadshow curated to sell Etsy stock to poor people, so Black-and-White doesn't give two shits about the moral gray area in which Etsy has always sought to operate. To put it more broadly, Black-and-White is wondering aloud if Etsy is the multi-billion-dollar online B Corp flea market determined to give away profits in an attempt to save the world, or the multi-billion Silicon Alley e-commerce play that took a sweetheart deal from New York State to rent space from Jared Kushner and then got caught setting up a "Double Irish" tax haven.
Obviously, Black-and-White would prefer the latter, but so should the rest of Etsy's shareholders - a group which by the way includes a litany of notoriously patient and altruistic funds like Janus, BlackRock, DE Shaw, Citadel and Paulson & Co. It is frankly staggering that this roster of flinty-eyed capitalist assassins has waited for a nine-month-old hedge fund to demand that Etsy shit or get off the pot.
But like all things Etsy, we are only confused because we are applying cold business logic to our thinking. And everyone knows that Etsy is magic.