The Only Thing Stupider Than an Etsy IPO Is Some of the Crap on Etsy

Let me preface this post by saying I've used Etsy. I've coveted squirrel riding a rattlesnake taxidermy (j/k vegan friends) and often borrowed DIY craft ideas from overpriced Etsy listings because I'm just a dork like that. I've tried -- without luck -- to sell paintings on Etsy. And boy do I miss Regretsy (RIP).

Now, let's talk about what's wrong with Etsy. It's well known that Etsy looks the other way when it comes to resellers who get away with selling "homemade" products that were likely made little baby hands in China. Sometimes, these resellers will at least try to make their product look unique or homemade by slapping a coat of paint or a little glitter on it. More often than not, though, they sell mass-produced garbage as is, without even bothering to pass it off as something they cobbled together after a trip to Michael's after being dumped by their boyfriend.

Yeah, that's not supposed to happen on Etsy. But it does. And Etsy knows it.

So fine, they're letting resellers slide. Big deal.

The thing you really need to know about Etsy since we're talking about an IPO here is that -- much like many of their .com or poorly-thought-out-total-bullshit startup counterparts -- the accounting is completely fucked up.

DealBook writes:

Still, in its decade of existence, Etsy has become a significant business. It reported $195.6 million in sales last year, up 56 percent from the previous year. And as of Dec. 31, it had 685 employees, most of whom are still based in the Dumbo neighborhood of Brooklyn.

That sounds great. But...

Like other Internet companies that aim to go public, Etsy presents a measure of earnings that differs from that required by generally accepted accounting principles. Etsy’s own metric, known as adjusted Ebitda, or earnings before interest, taxes, depreciation and amortization, says that the company made $23 million last year. But it lost $15 million according to standard accounting principles.

Adjusted Ebitda was positive because in addition to excluding taxes, depreciation and amortization, it did not count the cost of paying employees in stock.
Imagine if we were able to apply EBITDA to our own personal checkbooks. Instead of being flat broke and needing to pay my rent, my landlord would actually owe me money because magic. Isn't accounting fantastic? Especially when it's pretty much completely made up and not at all useful except to part a fool and his money.

Is an Etsy IPO peak tech bubble? Not even. There are far more ridiculous IPOs to come before the bottom blows out of this bitch. And when it inevitably does, some of those living high on the hog now will be in the same San Francisco alley as the mascot, blowing Daly City dads for a hit.

Oh, and since we're on the topic, here are some ridiculous Etsy items for your enjoyment (note: some of these are intentionally ridiculous while others are, well, too ridiculous to warrant existence on this planet).

While we're on the subject, I'm just going to leave this here.

This bizarre pregnancy test Koozie

Or maybe Mickey Mouse is more your pregnancy test speed

Birthday Candle tortoise cozy (OK, not even going to lie, this is actually awesome)
I have to confess, this Ink Sketch of Your Mom is incredible: "This is a 9"x12" ink sketch of your ugly mom. Put this up in your house and offend your friends when they think you're talking smack about their mom."

You get the point. Good luck with that IPO, Etsy, and smart on you to cash out while you can. I'm going to print out your prospectus so I can later bedazzle it and sell it as a handmade craft on your own site.

Jr Deputy Accountant

Some say he’s half man half fish, others say he’s more of a seventy/thirty split. Either way he’s a fishy bastard.