New York, Feb 19, 2026, 15:04 EST — Regular session.
- Etsy shares rise about 9% as it agrees to sell Depop to eBay for roughly $1.2 billion in cash
- Company guides first-quarter GMS below last year, but flags modest growth for 2026
- Analysts frame the sale as a margin and focus play as demand stays patchy
Etsy stock rose about 9% to $48.04 in afternoon trade on Thursday, after swinging between $45.06 and $54.03. The move followed Etsy’s agreement to sell secondhand fashion app Depop to eBay for about $1.2 billion in cash, a deal the companies expect to close in the second quarter. (AP News)
The divestiture gives Etsy fresh cash and strips out a unit analysts saw as harder to value while the company tries to restart growth in its core marketplace of handmade and vintage goods. Investors looked past softer quarterly results and a forecast for first-quarter gross merchandise sales (GMS) to fall year on year; CFRA analyst Arun Sundaram said Depop had been “overlooked” and was “meaningfully less profitable” than Etsy’s core marketplace. Etsy bought Depop for $1.63 billion in 2021 and has been grappling with soft demand and tougher competition from larger online players, including Amazon. (Reuters)
eBay pitched the purchase as a way to pull in younger shoppers and deepen its push into “recommerce,” CEO Jamie Iannone told Reuters. The company said the Depop deal should close in eBay’s second quarter and could add one to two percentage points to its 2026 gross merchandise volume growth. (Reuters)
In a release filed with the SEC, Etsy said fourth-quarter revenue was $881.6 million and consolidated gross merchandise sales (GMS) — the value of goods sold on its platforms — was $3.59 billion, with a take rate, its revenue share of GMS, of 24.5% and adjusted EBITDA, a profit measure, of $222.5 million. Etsy forecast first-quarter GMS of $2.38 billion to $2.43 billion and said it expects slight GMS growth for full-year 2026; with the Depop sale, it said it will classify the unit as discontinued operations from the first quarter. Etsy ended 2025 with $1.8 billion in cash and investments and repurchased about $133 million of stock in the fourth quarter; CEO Kruti Patel Goyal said it is working to bring the marketplace “back to sustained growth,” and CFO Lanny Baker pointed to “early indicators of progress.” (Etsy, Inc.)
For Etsy, the sale is another step toward simplifying the business after a long comedown from the pandemic boom. It also puts more attention back on the core marketplace’s ability to hold onto buyers without leaning on big promotions.
Traders will watch whether Etsy can keep GMS from sliding as it leans on marketing and its ad tools to lift revenue per order. The first-quarter range sets a low bar, but it still leaves little room for another shock to discretionary spending.
But Etsy’s own outlook still points to a year-on-year drop in first-quarter GMS, and any slip in buyer activity can hit its services revenue quickly. The Depop deal also needs to clear customary closing conditions; delays would keep results noisy and could dent the “clean-up” trade.
Some investors will treat the Depop price tag as a signal on what Etsy can recover from past deals, not just a bet on 2026 demand. Getting cash now helps, but it also revives the capital-allocation debate.
With Depop moving to discontinued operations, headline growth rates will read differently in the coming quarters. That puts the core marketplace scorecard — buyer trends, take rate and margins — back in the center of the conversation.
The next catalyst is progress on closing the Depop sale in the second quarter and Etsy’s first-quarter update on GMS and profitability.
