Motley Fool: Handmade and vintage e-commerce
A company known for its handmade, vintage items may not seem like a stock and internet sensation, but the Etsy (Nasdaq: ETSY) online marketplace has been in tears, having roughly quintupled in value over the past three years. last years. Best of all, it’s ready for new growth.
In the first quarter, Etsy saw revenue growth of 141%, while its net profit more than increased tenfold. The past few quarters have seen rapid growth, but management has warned of some headwinds and slower growth now that the US economy is reopening and many people are resuming shopping in physical stores.
There’s still a lot to like about Etsy’s outlook, however. On the one hand, double-digit growth is still respectable. In addition, e-commerce continues to grow and the pandemic has made more and more people accustomed to shopping online. Etsy has also seen a boom in new buyers and sellers on its platform – a sign that brand awareness and engagement has also increased. Active buyers on the platform nearly doubled to 90.7 million over the past year, and active sellers increased 67% to 4.7 million.
Finally, the surge in profits shows the scalability of the company’s market model, and profit margins are only expected to improve over the long term. Recently down about a quarter from their 52-week high, Etsy shares are starting to look like a bargain. (The Motley Fool owns stock and recommended Etsy.)
Ask the fool
Question: What happens to my mortgage if I die before I pay it off? – CS, Opelika, Alabama
A: If you have a co-signer or co-borrower on the mortgage (for example, you borrowed the money with your spouse), that person will be responsible for making the payments. If there is no co-signer or co-borrower, someone will likely inherit the house. They can then take over the mortgage without having to apply and be approved for a home loan. Federal laws allow heirs to assume mortgages.
In either case, if the payments do not continue, the lender has the right to foreclose, as mortgages are “secured” loans – secured by the property.
Often times, a house will be sold on the death of its owners – in order to pay off debts, or maybe just because no one wants to keep the house. If a deceased person has other unpaid debts that cannot be paid off without selling the home, some states require it to be sold to settle the estate.
It is worth making it clear in your will who is to inherit your home upon your death. Consulting a lawyer specializing in estates can be helpful.
Question: If a stock splits, what happens to its P / E ratio? – LF, Sioux City, Iowa
A: A split does not change the price / earnings (P / E) ratio. The AP / E ratio is simply a company’s share price divided by the previous year’s earnings per share (EPS). A stock traded at $ 50 per share with an EPS of $ 5 will have a P / E of 10 (50 divided by 5). If the stock divides 2 to 1, the stock price will be $ 25 and EPS will also be halved, resulting in an unchanged P / E, because 25 divided by 2.5 is 10.
My dumbest investment
My dumbest investment was in the CafePress IPO. I burned myself. – JL, online
The madman replies: CafePress still exists, as a website where anyone can upload designs that others can purchase, printed on T-shirts, mugs, cards, and other products. Founded in 1999, the company defines itself as “the recognized pioneer of customizable products”.
CafePress went public – selling its own shares through an initial public offering – in 2012. While some IPOs soar immediately (often to take hold later in the year), CafePress’s debut was, according to the terms of one report, “lukewarm”: the shares started trading at $ 21.50 and ended the day at $ 19.03. The share price had been rich, with a high price / earnings (P / E) ratio, which raised very high expectations that were ultimately not met.
Within a few years, the company was in trouble, posting declining revenues, laying off workers and slashing the salary of its CEO. One problem, apparently, was that a change in Google’s algorithm no longer placed CafePress high in search results, resulting in fewer visits to its site and fewer sales. In 2018, CafePress was acquired by Snapfish, which later merged with Shutterfly; in 2020, CafePress was acquired, by PlanetArt.
You weren’t the only investor burned out. When it went public, CafePress was valued at over $ 320 million; Snapfish bought it for around $ 25 million. It is often good to avoid IPOs in their first year.