Vintage and Handmade Etsy Marketplace is a stock sensation

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The motley fool

A company known for its handmade and vintage items may not seem like a stock and internet sensation, but the Etsy online marketplace has been in tears, having roughly quintupled in value over the past three years. Best of all, it’s ready for new growth.

In the first quarter, Etsy saw revenue growth of 141%, while its net profit increased more than 10 times. The last quarters have seen very rapid growth, but management has warned against 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 accustomed more and more people to shop 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 in 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 in the long run. 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

From CS to Opelika, Alabama: What happens to my mortgage if I die before I pay it off?

The madman replies: 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 – to pay off debts, or maybe just because no one wants to keep the house. If a person who dies 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 should inherit your home upon your death. Consulting a lawyer specializing in estates can be helpful.

From LF to Sioux City, Iowa: If a stock splits, what happens to its P / E ratio?

The madman replies: A split does not change the price / earnings ratio. The AP / E ratio is simply a company’s share price divided by the previous year’s earnings per share. 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.

School of fools

Few of us want to think about our death, let alone plan for it. But postponing it can be a big mistake, as a lot of people die much sooner than they expected. Dying without an estate plan in place could leave your loved ones with unnecessary headaches and hassles at a time when they are in mourning.

Get your things in order now, and then you can forget about them for quite a while. (Check them out every now and then, though, perhaps by updating the layouts, as some people may have entered or exited your life since the last time you made your plans.) Here are a few things to know:

  • Probate is the legal process of administering an estate. It involves demonstrating the validity of a will, cataloging and valuing the deceased’s property, distributing property, paying debts and taxes, transferring title and more. This can be tedious, and sometimes time consuming and / or costly, with assets able to sit in limbo until everything is sorted out.
  • While the rules are different in each state, you can probably get around probate by taking some action now, such as creating a living trust – or life estate, in which you officially transfer title to various. properties to your heirs before you die. It may also be useful to designate certain relatives as “transfer on death” or “payable on death” beneficiaries on various financial accounts. The contents of these accounts pass immediately to the designated beneficiary upon your death.
  • The most important thing to do is to avoid dying “intestate” – without having established a will or trust. If you do, your estate will be managed according to government rules, with your assets distributed according to formulas.

You can find out more by visiting Nolo.com and searching for “estate planning”, then clicking “Articles”. Or consult books such as Plan your estate by Denis Clifford (Nolo, $ 45) and Estate planning by Deborah Jacobs (DJWorking Unlimited, $ 25). Consulting a professional can also be a good idea.

My dumbest investment

From JL, online: My dumbest investment was in the CafePress IPO. I burned myself.

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 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 as prominently in search results, which resulted 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.

Who am I?

My roots go back to 2003, when several Harvard students created a website where others could rate the attractiveness of other students. The following year, they started me as an online community for school. I grew up – and now almost 1.9 billion people use me daily, while over 2.8 billion use me each month. About 36% of American adults recently reported hearing from me regularly. Based in Menlo Park, Calif., I employ over 60,000 people and make over $ 94 billion a year. My businesses include Instagram, WhatsApp, Messenger, and Oculus. Who am I?

Can’t remember the question from last week? Find it here.

Trivia response from last week: Diebold Nixdorf


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