Jefferies expects Etsy to come under pressure once again if GMS growth subdued

Jefferies notes that Etsy shares have rallied 14% since the company disclosed on February 1 that Elliott Management had accumulated a sizable stake and gained board representation, though the firm expects the stock to come under pressure once again if GMS growth remains subdued after any operational changes are announced. The firm sees four potential recommendations from Elliott: take rate increases from higher fees or optional value-added seller services; cost cuts; divesting non-core assets like Reverb and Depop; and new and improved disclosures. The firm, which is looking for any new details with Q4 earnings, keeps an Underperform rating and $55 price target on Etsy shares.