In after-hours trading, the company's stock dipped as low as $16.46 per share. The announcement is the company's second quarter announcement since going public four months ago. The e-commerce platform provided by Etsy, based out of Brooklyn, New York, allows artisans to sell handmade and vintage goods, and had an IPO that valued the company at over $3 billion.
Etsy had a strong debut, but the stock has only declined since. The stock opened on April 16 at $31 per share and jumped all the way to $35.67. The stock closed on its first day of trading at $30, an 86 percent increase over its initial price.
The company has since lost almost 36 percent of its value since its IPO, and currently has a market value of $2.3 billion. Etsy is grappling with issues of profitability and has historically operated at a loss. The company warned early investors in an S1 filing that it might not be able to maintain profits heading into the future, but the market's desire for a fresh tech company spurred a flurry of trading activity nonetheless.
Analysts downgraded shares of Etsy in May due to concerns about counterfeit goods including Louis Vuitton, Chanel, and Michael Kors knockoffs, appearing on the site. Etsy's exposure to regulatory violations was much higher than other online marketplaces like Alibaba or eBay.
The site had 1.5 million active sellers and 21.7 active shoppers on June 30 of this year. While users are up for the online marketplace, they are still reporting alarming losses that could threaten their very business model.