Etsy shares surged nearly **20%** in premarket trading on Thursday, February 19, 2026, eventually stabilizing at a gain of approximately **10%** following the announcement of a major strategic divestiture. The online marketplace has entered into a definitive agreement to sell its Gen Z-focused fashion resale platform, Depop, to eBay for **$1.2 billion** in cash. Investors appeared to look past mixed fourth-quarter results and a conservative forecast to cheer the company’s return to its "core" marketplace strategy. While Etsy surpassed bottom-line expectations with adjusted earnings of **$0.92 per share**—beating the **$0.85** analyst consensus—its quarterly revenue of **$881.6 million** fell slightly short of the **$884.1 million** expected by Wall Street. The sale of Depop represents a significant pivot for Etsy, which originally acquired the platform in 2021 for **$1.62 billion**. By offloading the subsidiary for **$1.2 billion**, leadership aims to streamline operations and improve overall margins. Depop had been a drag on profitability, contributing to a **350-basis-point** reduction in consolidated adjusted EBITDA margins during 2025 due to high marketing spend and a lower take rate. For eBay, the acquisition is a calculated bet on the "recommerce" boom and younger demographics. Depop currently boasts **7 million** active buyers, nearly **90%** of whom are under the age of 34. The platform generated approximately **$1.1 billion** in gross merchandise sales (GMS) in 2025, showing nearly **60%** year-over-year growth in the United States. eBay plans to integrate Depop’s inventory with its own global logistics and authenticity guarantee programs. Etsy’s core marketplace showed its first signs of stabilization in years. U.S. buyer GMS grew by **0.3%** in the fourth quarter, marking the first positive growth for this segment since late 2021. Consolidated GMS reached **$3.6 billion**, up **2.4%** year-over-year when excluding the divestiture of the music-gear site Reverb. The company expects to close the Depop transaction in the second quarter of 2026. Management intends to use the **$1.2 billion** in proceeds for general corporate purposes, including aggressive share repurchases and reinvestment into its primary platform. Looking ahead to the first quarter of 2026, Etsy guided for GMS in the range of **$2.38 billion** to **$2.43 billion**. This forecast implies a year-over-year growth of **2%** to **4%**. The company also expects a take rate of **25.5%** and an adjusted EBITDA margin between **28%** and **30%** as it exits non-core businesses and focuses on its gifting and handmade categories.