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Handmade At Amazon: A Crafty Ploy Paving The Way For An Etsy Buyout?

Summary

Etsy's share price has been dramatically affected by Amazon's entry into the handmade market.

Handmade at Amazon is a poor competitor to Etsy on most levels.

Amazon may have released a token marketplace for the express purpose of driving Etsy down.

Etsy is currently priced as an attractive acquisition possibility.

Much has been written about Etsy's (NASDAQ:ETSY) fate in the face of new competition from Amazon (NASDAQ:AMZN).

While the direct impact of Handmade at Amazon's existence on Etsy's bottom line is reported to be marginal at best, the market's reaction has been unequivocal. The day before Handmade at Amazon's October 8th launch, Etsy was trading at $14.18. In the week that followed, it fell more than 22% to $10.99. Three months later, it's trading around $7.71 or roughly 45% below its pre-Handmade at Amazon price.

With very little company news breaking over the past three months, Amazon appears to be the largest factor in Etsy's market decline.

Amazon's ever-extending reach

Already a gargantuan business, Amazon is currently undergoing a phase of rapid expansion. The company is diving into a wide variety of new markets, including grocery delivery, small business loans and streaming...


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