On Etsy and Eumenides

Etsy Inc. may have paid a price this week for trying a custom-made initial public offering. 

Shares of the online craft-and-vintage goods marketplace fell 18% Wednesday following its first public earnings release. While the company’s results missed some growth forecasts, observers said the fall may have been exacerbated by the unusual ways Etsy structured its April IPO. 

IPOs typically follow a standard playbook in terms of how companies work with banks and potential investors. But Etsy diverted from those practices, using fewer research banks than other similar deals and targeting a smaller number of big shareholders. That meant there were fewer analysts than usual closely following the stock and potentially fewer shareholders already invested in it eager to buy more. 

These tactics, along with a stunning rise on its first day of trading, together left the stock vulnerable to a downdraft, traders and analysts said. 

Demos, Telis. "Etsy's Unique IPO Crafts Stock Swoon." The Wall Street Journal., Friday, May 22, 2015, C1, Accessed on May 22, 2015, http://www.wsj.com/articles/etsys-unique-ipo-crafts-a-stock-swoon-1432249972

In Aeschylus's The Eumenides Athena, the goddess of wisdom, argues at trial that citizens should, "never pollute [law] with innovations. No . . . foul a clear well and you will suffer thirst. " Perhaps if Etsy hadn't gone fixing something that wasn't broken they wouldn't have suffered a 42% drop of stock price in just under 25 days, a near record in that time frame. Granted, The Eumenides deals in the foul subject of matricide and - if we're being honest here - only a fraction of Etsy's wares for sale rise to that level of monstrosity. Still, without good reason to act otherwise I think we'd all do better to rely on the embedded wisdom of inherited tradition.