Black-and-White owns about 2% of Etsy.

By Reuters
May 2, 2017

Hedge fund Black-and-White Capital on Tuesday called on Etsy, an online retailer of handmade goods, to explore a sale, saying the U.S. company’s sales growth had slowed while costs had increased.

Shares of New York City-based Etsy etsy rose 2.4% to $11.32 in morning trading.

Black-and-White owns about 2% of Etsy, the activist hedge fund said.

Etsy’s intrinsic value could reach $30 per share with operational improvements, and the company could be valued at $15.50 per share if sold immediately, Black-and-White said.

The hedge fund also said Etsy should separate the roles of chairman and chief executive, which are currently held by Chad Dickerson.

Black-and-White said growth in Etsy’s gross merchandise sales—the dollar value of items sold in its online markets—had slowed due to flaws in its search algorithm.

Etsy’s shares have fallen more than 30% since their initial public offering two years ago.

Etsy did not immediately respond to a request for comment.

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