@MailBling Etsy is not broke. They have cash reserves and a 200 million line of credit, plus daily cash flow. All that together makes Etsy able to weather this. Here is an article about SVB and Etsy:
https://www.eseller365.com/etsy-delays-seller-payouts-silicon-valley-bank/?fbclid=IwAR22ODntY0J6koTx...
Etsy Exposure to Silicon Valley Bank
Late in the afternoon, Etsy sellers on online forums began complaining that their scheduled payout for Friday, March 10 had been automatically delayed until Monday. Some people began to speculate that Etsy may be using SVB and that this massive delay was connected to the bank’s failure.
Now, Etsy issued an email to sellers confirming the reason their scheduled deposit was delayed due to “recent developments regarding Silicon Valley Bank, who Etsy uses to facilitate disbursement to some sellers.”
Etsy further said, “We are working with our other payment partners to issue your deposit as soon as possible.”
The company didn’t provide any further details on how large its exposure is to SVB. However, unlike VC backed startups and smaller tech firms that may have most of their funds in one bank, Etsy should have the financial resources to make sellers whole relatively quickly.
While affected sellers their payout information says March 13 now, the email from Etsy doesn’t offer that specific date. Sellers should expect that payouts could be delayed a little further, depending on how quickly Etsy can arrange for an alternative distribution solution.
For those worried about Etsy’s financial situation, let’s take a brief look at their last financial filings(Form 10-K).
At the end of 2022, the company had $1.2 billion in cash, cash equivalents, and short- and long-term investments. Of that, $921 million was in cash and cash equivalents.
In addition, Etsy has a revolving credit facility (credit line) of $200 million, which was still available in full at the end of the year. In other words, they weren’t using any of it.
Obviously, without knowing the exact exposure the company has to SVB, we believe Etsy should have enough financial resources to pay sellers. It finished the year off better than many of its peers.
Another good sign for sellers is that the company’s stock price has remained stable in after hours trading, further indicating that the “smart money” on Wall Street is not concerned as well.
