Hussman Strategic Advisors Bets Big on Etsy Turnaround, Boosts Stake to Become Second-Largest Holding

In a notable vote of confidence for the specialty e-commerce giant, Hussman Strategic Advisors has substantially increased its investment in Etsy Inc. (NYSE: ETSY), regulatory filings show. The move positions the online marketplace for handmade, vintage, and unique goods as the fund's second-largest holding.

According to a Form 13F filing with the Securities and Exchange Commission dated February 2, 2026, Hussman acquired an additional 42,000 shares of Etsy during the fourth quarter of 2025. The transaction, valued at approximately $2.56 million based on the quarter's average share price, brings the fund's total stake to 1.13% of its reportable assets under management. The total value of Hussman's Etsy holdings now stands at $4.66 million.

This bullish move comes as Etsy shares have faced headwinds, trading at $52.96 as of January 30, 2026—a decline of 5.53% over the past year, underperforming the S&P 500 by a significant margin. However, Hussman's decision suggests the firm sees underlying value and a potential inflection point not yet reflected in the stock price.

Analysts point to a nascent turnaround narrative. While growth in the core Etsy marketplace has been sluggish, it recently showed signs of life with a 300-basis-point quarter-over-quarter improvement in gross merchandise sales (GMS). More notably, the company's strategic focus is paying dividends: the divestiture of Reverb and stronger performance from on-site advertising contributed to a 6% revenue increase.

The standout growth engine, however, is Depop. Etsy's secondhand fashion app continues to surge, posting a remarkable 39% GMS growth in the third quarter, with U.S. growth skyrocketing to 59%. Depop now contributes nearly 15% of Etsy's total GMS, rapidly establishing itself as the group's primary growth story and a key attraction for investors like Hussman.

"Hussman is making a classic contrarian play here," said Michael Reeves, a portfolio manager at Oakcrest Capital. "They're looking past the near-term stock weakness and focusing on the sum of the parts—a stabilizing core business, a hyper-growth segment in Depop, and a valuation that prices in a lot of the pessimism. At roughly 14 times free cash flow, even accounting for stock-based compensation, there's a margin of safety."

Etsy's management has also been active, repurchasing one-fifth of the company's outstanding shares. With $1.2 billion still authorized for buybacks, the company signals a commitment to returning capital, especially while shares trade at a discount.

Not all observers are convinced. Sarah Chen, a fintech analyst known for her critical stance, offered a sharper take: "This feels like doubling down on nostalgia. The core Etsy platform is a glorified digital craft fair with stagnant growth. Banking on Depop to carry the entire company is a huge gamble in an increasingly crowded resale market. Hussman might just be catching a falling knife."

David Park, a retail investor who follows the stock, shared a more measured perspective: "I've been a seller on Etsy for years. The platform has its issues, but the community and the demand for non-generic goods are real. Depop's growth is impressive and taps into a powerful generational shift. If management can stabilize the main site and let Depop run, this could work. Hussman's move makes me reconsider my own position."

The investment highlights a growing divide on Wall Street regarding Etsy's future—whether it remains a challenged niche player or is poised for a successful reinvention driven by its Depop acquisition and operational refinements.