Why Etsy Stock Popped Today
Key Points
Etsy and eBay reached an agreement that should benefit both companies.
The deal will help to streamline Etsy's operations and bolster its cash reserves.
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Shares of Etsy (NYSE: ETSY) climbed on Thursday after the e-commerce platform agreed to sell its secondhand clothing business to eBay (NASDAQ: EBAY).
By the close of trading, Etsy's stock price was up more than 9%.
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A mutually beneficial asset sale
Under the terms of the deal, eBay would purchase Etsy's consumer-to-consumer fashion marketplace, Depop, for $1.2 billion in cash.
The re-commerce platform is popular among Gen Z and Millennial customers, with 7 million active buyers -- mostly under the age of 34 -- and over 3 million sellers.
Depop's annual gross merchandise sales surged almost 60% in the U.S. in 2025, reaching roughly $1 billion worldwide.
"Depop has built a trusted, social-forward marketplace with strong momentum in the pre-loved fashion category, and we are confident that as part of eBay, Depop will be even more well-positioned for long-term growth, benefiting from our scale, complementary offerings, and operational capabilities," eBay CEO Jamie Ianonne said in a press release.
Refocusing on its core business
Selling Depop will enable Etsy to concentrate its efforts on expanding its e-commerce marketplace for unique and creative goods. The $1.2 billion in cash it expects to receive is equal to about a quarter of its current market capitalization. Etsy plans to use the cash to fund its growth initiatives and to buy back its stock.
"We believe this transaction is a great outcome for Etsy's shareholders, and a positive next step for all involved," Etsy CEO Kruti Patel Goyal said.
The sale is projected to close in the second quarter of 2026, subject to regulatory approval.
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Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Etsy and eBay. The Motley Fool has a disclosure policy.
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