Etsy's bank fails... what next?

[#1]

The collapse of Silicon Valley Bank today is awful news.  I wonder what this means for Etsy sellers and funds.  

https://www.wsj.com/articles/after-silicon-valley-bank-fails-tech-startups-race-to-meet-payroll-4ebd9c5c

[bradgoodell]

Etsy notified those affected by Friday's deposit delay on Friday.

They posted this today:  https://community.etsy.com/t5/Technical-Issues/UPDATE-03-10-23-USD-Disbursements/m-p/141527053#M7633...

I'm guessing we will all receive emails and/or dashboard notifications too.  

Not all articles are as harsh as the Daily Mail. I take scare articles with a grain of salt.  They never quote the person saying "No, I'm not worried!"  

[FavorZilla]

What does  'SVB bank to process payments" actually mean? Was SVB the facilitator to get up the money from a different bank? Or is our money IN that bank but now locked up because of the failure??

[BirdsongEmporium]

Well it is hard to say what is going on whether Etsy had significant funds at the bank or was just using the bank in transferring funds to sellers. What I do know is Etsy has to reprogram in order to bypass whatever they were doing with SVB. This is money disbursement which means we don't want them to do a poor programming job. So although I do understand people wanting a quick fix, making sure the fix is one that works properly is the critical point.

[Beadcomber]

while many of us are not overly concerned about Etsy being able to continue business as usual and that panick can cause all sorts of problems, it's obvious that the SVB's CEO's knew what was coming and weren't going to be Captains that would sink with their ship because they withdrew Millions and sold shares Feb 27th. Becker is the Chief of SVB is the very guy who pressed Congress to weaken Risk regulations, tsk tsk tsk.

 Becker had sold $3.57m of stock in a pre-planned, automated sell-off two weeks before the bank collapsed - and the CFO ditched $575,000 the same day...they are obviously at the forefront that caused all of this to unravel.

CEO Greg Becker sold 12,451 shares at an average price of $287.42 each on February 27. SVB's CFO Daniel Beck sold 2,000 shares at $287.59 per share on the same day as his boss. The price plunged to just $39.49 in premarket Friday before the Federal Deposit Insurance Corporation seized its assets.

Also, as per Bloomberg, on Thursday, Peter Thiel, Co-founder of PayPal and of Founders Fund also withdrew Millions from SVB and told other Investors to pull their funds. 

[CoquetteBath]

so Martha Stewart went to prison for insider trading.

if folks were tipped off, and got information that 'regular Joe or Jane' did  not...that insider trading.

People could go to jail for that. Clearly, there is precedent.

[ToxicFemme666]

Lock 'em up! And Silverman too while we're at it

[BrizelButtons]

yes... it was a planned bank collapse. Did Etsy get it's money out as well? Will we ever get to find out? and why are "they" so convinced that there will not be a domino effect in the banking world... pretty convinced that's what the FED want. That and the further eradication of small businesses.

[BluePoppyBath]

Yes it looks like some big wigs were made aware of the problem earlier and made the money run.

[IronGoose]

Oprah Winfrey lost $590 Million alone - 96% of the total losses were not insured. This is a big deal and will have a ripple effect! OBTW I received the email as a daily depositor and have not received any $$ since Thursday - We'll see what happens but as of Tuesday, I am stopping shipments - possibly switching back to PayPal

[dayspringcollectible]

As a US seller, you don't have the option to go to Paypal.  Etsy Payments are required.

People are making a big deal out of nothing.  Etsy got blindsided by one of its banks.  They'll switch over to their other banks and in a few days everything will be back to normal.

[tacosvintage]

hi. everyone i hope all is well,  they have my money too and i'm just starting out with my shop,  a big company and no phone number to talk to a live person,  wheres the get us our money teams.

[IronGoose]

ETSY policy: "When you’re enrolled in Etsy Payments, and PayPal is available in your country, buyers who purchase items from your shop can pay using PayPal. Your sales funds will go into your Payment account on Etsy instead of appearing in your PayPal account." Does this mean that we will have to bill the customer directly, outside of ETSY, to get payment? This could be a huge mess.

[dayspringcollectible]

Nothing has changed from how your finances have been managed since Etsy Payments went into effect a few years ago.  Buyers have always been able to use Paypal to pay.  It goes into  Etsy's account and is disbursed to you.  Sellers don't have the ability to send their disbursements to their own Paypal account, only to their bank account, and customer payments have never gone directly to the seller since they removed "Other" as a form of payment several years ago. 

[BrizelButtons]

Please reread this sentence: Your sales funds will go into your Payment account on Etsy instead of appearing in your PayPal account.

US Sellers no longer have the option of receiving etsy sale money through our personal Paypal accounts. Etsy became its own banking system and enforced that rule of law on us with Etsy Payments system.

[FeltWithAHeart]

I just saw another news story on tv about this, and it mentioned etsy sellers worrying about not getting paid.

[greenmelonstudios]

Which if they keep broadcasting it, will turn off buyers from shopping

[IronGoose]

Hopefully ETSY financials are diversified beyond SVB- Time will tell - 

[dayspringcollectible]

Etsy uses several banks, has a cash reserve of over $900 million, and a $200 million dollar line of credit that is unused.  They will suffer a loss of the uninsured funds, but are not in any danger.  Wall Street barely blinked when it came to Etsy's stock price on Friday, compared to how they reacted to  small companies that are in real trouble.

[LaughingLambFibers]

https://www.barrons.com/articles/etsy-stock-price-rating-double-downgrade-1824046d

[dayspringcollectible]

That downgrade was done before the bank failure, and was done by someone who shorts stocks.  Such reports are often an attempt to make the price would go down to make money off the "short" and have to be taken with a grain of salt.

I think many of us believe Etsy stock is going to be weak, however, as they deal with issues such as the counterfeiting going on.  So that is not a surprise.  In fact, the surprise for many is that the stock has been as resilient as it has.

So far the bank failure has had little effect on Etsy stock, revealing that Wall Street analysts aren't concerned.  We'll have to see if that changes once the full extent of the loss becomes public, which will likely take a while.

[junkbay]

I am taking a wait-and-see approach. Obviously if not resolved by Tuesday, I will attempt to cancel my sales, and refund the buyers. If that fails, I will go dark, but ship everything that is sold. I already have an email drawn up on what to tell them, and a redirect to my website to re-purchase if they like. Has anyone had any issues with refunds?

[ThePurplePuppy]

@junkbay 

I said before in another thread--I do not see any reason a refund cannot be given.  If you have money sitting in your payment account waiting to be sent to the bank then the refund comes from that--if you don't it is charged to your CC. That would not have anything at all to do with this failure to send money to our banks.

So far no one has commented on what I have said--they are to busy freaking out, I suppose.

I do feel for the people who depend on Etsy for their full time job. Way back when I started on here in 2008 I never bought into the claim that one could make a living here so quit your day job! 

[VintageYardMarket]

Should we suspend our shops for now? 

[ToxicFemme666]

No, probably not. 

[dayspringcollectible]

Why?  Everything is still operating as it should.