ETSY Props up Stock thru Buybacks + Employment Compensation | Short

As expected, one of the biggest supports for Etsy's stock has been its aggressive share repurchase program. The company has retired about 19% of its outstanding shares over the last two years and plans to continue using excess cash to buy back even more stock. That reduces the share count and lifts EPS, helping support the share price even as the underlying marketplace continues to face growth challenges.

They continue to raise guidance for buybacks to $2 billion more; however, their net debt continues to grow in excess of $3 billion. They lost 3% of average repeat buyers, and drop y/y. Net of inflation, the only thing keeping this stock in these levels is perpetual buybacks and less growth/innovation.

At the same time these buybacks occur, senior executives continue cashing out millions, over $30 million to ex-CEO Josh Silverman in just a few weeks from antiquated stock plans written years ago.

If I was an employee and knew my company just laid off 16%+ of my team, and yet has $2 billion to buy shares back, that is not a growth company, that is artificial inflation.

The wash continues.

P/T: $65/share.

Short - 20,000 shares.