Etsy Stock Stumbles on Counterfeit Goods Report

12 Jun 2015
by David Jannetta
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Etsy Stock Stumbles on Counterfeit Goods Report

Investor Community Beware!

A blog published by the World Trademark Review a few weeks ago highlighted the dangers, and the costs, companies face if they ignore counterfeiters trying to take advantage of their app or marketplace.

In this case, the author details an analyst report conducted by the investment firm Wedbush which did research into the online marketplace Etsy. The report “issued a stark warning about the large proportion of potentially infringing items being sold on the site, causing the stock to plummet.”

Wedbush claims that up to 2 million items being sold on Etsy are potentially counterfeit or infringing of copyright or trademark rights. Their report was so scathing that Etsy’s stock price dropped 8% on the day of publication as Wedbush downgraded the stock to underperform because of the piracy.

Finally, the report notes: “If Etsy chooses to continue to ignore these potential violations, we believe it could tarnish its brand with both buyers and sellers…” and called for added scrutiny of the Etsy brand.

Just as brand owners need to be aware of the problems in marketplaces such as Etsy, they face the same piracy challenges in the app stores. Our next blog will take a look at some of the pending IPO candidates and highlight some of the problems they should address around their brands in all of these u-marketplaces.

Our experience is that there will be far more counterfeit apps in the marketplaces than official ones, and these companies and the investment community should consider this a major risk factor as they look to an IPO.

Etsy is one of over 20 global u-marketplaces IP Lasso monitors for brand infringement on behalf of our clients. Let us know if you would like a free u-marketplace report, or give us a call. We would love to talk with you.

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