By Noel Randewich
SAN FRANCISCO (Reuters) - Shares of Etsy Inc (O:ETSY) surged more than 20 percent on Tuesday and were on track for their biggest daily gain since 2015 after two investment firms revealed stakes in the online crafts retailer and the company said it was reviewing its strategy.
Etsy nearly doubled in its stock market debut in 2015 but then moved steadily lower, never to regain its early high as it faced competition from rivals such as Facebook (NASDAQ:FB), and failed to grow at the speeds expected by Wall Street.
TPG Group Holding Advisors Inc and Dragoneer Investment Group LLC late on Monday jointly reported an 8-percent stake in Etsy, a disclosure that came just weeks after activist hedge fund Black-and-White Capital LP, which owns roughly 2 percent of Etsy, urged the Brooklyn-based company to explore a potential sale.
Etsy, which reported a net loss of $421,000 this quarter, this month said it is laying off 80 people, roughly 8 percent of its workforce.
The average analyst recommendation for Etsy is currently between a "buy" and a "hold", according to Thomson Reuters data. The average analyst recommendation in May 2015 following Etsy's initial public offer was "hold".
The stock was up 22.5 percent at $13.89 in midday trade.