Citron Research has published a report on the prevalence of counterfeit goods on e-commerce company Etsy’s website, saying the issue is a sign of poor management[[B]].

The investor, which indicated it may have a short position in the company, said Etsy “is about to face a barrage of bad press that highlights this behavior
and compromises the integrity of the platform,” while earnings might suffer if it removed unlicensed product from sale.

The 9-page report was notable for its vagueness about the scale of the problem, with Citron saying it was “not going to do a complete expose and it is not our responsibility to account for what percent of Etsy’s revenue comes from these illegal activities.”

Shares in the New York-based company were down 6.48% at 1:30 p.m. ET, following the short report, denting momentum in a recovery that began in June 2022.