NEW YORK (CBSNewYork/AP) — Etsy Inc. is replacing its chief executive officer and cutting jobs as it faces pressure from shareholders upset with its lackluster profits and anemic stock performance.
The DUMBO, Brooklyn-based online crafts marketplace said Tuesday that it has named board member Josh Silverman as CEO, replacing Chad Dickerson, who also stepped down as board chairman.
The company also said it is also eliminating about 80 jobs, or 8 percent of its workforce, as it moves to trim costs.
The announcement came just hours after shareholder Black-and-White Capital made public letters it had sent to Etsy’s board lamenting what it called the company’s “destruction of shareholder value.” It called for Etsy to explore “strategic alternatives,” a phrase that often includes searching for a buyer.
Etsy’s stock tumbled more than 16 percent to $9.50 in after-hours trading Tuesday after the company unveiled the management move and posted a first-quarter loss of $421,000. It had a profit in the same period a year earlier.
Etsy went public just over two years ago with a splash that had is stock nearly doubling from its $16 IPO price in its first day of trading. But the stock has slumped amid stagnant sales and investor concern about counterfeit goods being sold on the site.
Its latest quarterly report did not impress Wall Street. On a per-share basis, Etsy said it had a loss of less than 1 cent in the quarter. The average estimate of four analysts surveyed by Zacks Investment Research was to break even.
Etsy posted revenue of $96.9 million in the period. Three analysts surveyed by Zacks expected $98.6 million.
Founded in 2005, Etsy is known for selling anything from a $110,000 antique desk from the 1800s to a $20 handmade antler pendant and everything in between. In 10 years, it grew from a scrappy startup offering craftspeople a way to sell necklaces and needlepoint online to a marketplace of 54 million members that had generated $1.93 billion in sales in 2014.
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