Etsy Inc. shares surged over 14% in after-hours trading on Wednesday following the announcement that eBay will acquire its secondhand clothing platform, Depop, for approximately $1.2 billion in cash. This deal marks a significant shift in the market, just five years after Etsy purchased Depop for about $1.62 billion, a move aimed at attracting younger consumers drawn to the app’s marketplace for used clothing, shoes, and accessories. Notably, around 90% of Depop’s users are under the age of 34, according to Etsy.
“We are excited that this transaction allows us to focus exclusively on the compelling opportunity we see in front of us: to grow the Etsy marketplace in ways that matter most to our buyers and sellers,” said Etsy CEO Kruti Patel Goyal in a statement. The acquisition is anticipated to be finalized in the second quarter of 2024.
In recent years, Etsy has pursued a “house of brands” strategy, acquiring various niche online marketplaces to compete against larger, more agile rivals such as Amazon. However, the company has since begun unwinding many of these investments, having divested from the Brazilian e-commerce site Elo7 in 2023 and the musical instrument marketplace Reverb last year.
Etsy’s growth has faced challenges since the surge in e-commerce during the pandemic, compounded by intense competition from platforms like Amazon, Shopify, and discount marketplaces such as Temu, Shein, and TikTok Shop. The company reported a decline in active buyers and gross merchandise volume year-over-year for 2024, a trend that continued into the following year. Factors contributing to these issues include economic headwinds from previous tariff policies during the Trump administration and a shift in discretionary spending among consumers.
eBay CEO Jamie Iannone described the acquisition of Depop as a strategic move to enhance the company’s footprint in the fashion sector. “This acquisition presents an opportunity to advance one of our newest and fastest-growing focus categories with a marketplace that complements our existing presence and enables us to reach a younger demographic across the expanding recommerce landscape,” Iannone stated.
In light of the acquisition news, eBay’s shares rose more than 8% during extended trading, coinciding with the release of its fourth-quarter earnings. The company reported adjusted earnings of $1.41 per share on revenue of $2.97 billion, surpassing analyst expectations of $1.34 per share and $2.88 billion in sales, according to LSEG. Sales rose 15% from the previous year, while gross merchandise volume increased by 10% to $21.2 billion, exceeding Wall Street forecasts of $20.8 billion.
Looking ahead, eBay expects to report adjusted earnings per share between $1.53 and $1.59 for the first quarter, with projected revenues ranging from $3 billion to $3.05 billion. Analysts had anticipated earnings of $1.48 per share paired with $2.8 billion in sales.
Etsy’s divestment of Depop reflects the shifting dynamics in the online marketplace landscape, where agility and a focused strategy are critical for success as competition intensifies in the e-commerce sector. As both companies adapt to the evolving market, stakeholders will be watching closely for the impacts of these developments on their respective performances.
Original Source: https://www.cnbc.com/2026/02/18/ebay-buying-depop-etsy.html
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Publish Date: 2026-02-19 05:09:00
