Etsy Inc. successfully floated on the NASDAQ Thursday with an opening price of $31 a share, a 91 percent premium on its listing price of $16 a share.

Trade was heavy given the company only released 16,666,666 shares in the float, with 19.75 million shares under the stock ticker ETSY changing hands in a price range from $28.22 through to a daily high of $35.74.

The stock closed the day at $30 a share (up 86 percent) valuing Etsy at more than $3.5 billion.

As we noted in our pre-IPO coverage, the company has yet to make a profit despite being founded in 2005. Etsy reported a $4.9 million net loss on $108.7 million net revenue in 2014 while in 2013 they recorded a $796,000 loss on $78.5 million in net revenue.

Social mission and profit

Etsy is a certified Benefit Corporation, or B Corp, meaning it has pledged to adhere to social and environmental accountability guidelines set by a nonprofit organization called B Lab. According to The New York Times Etsy is only the second for-profit company with the certification to go public.

“The success of our business model is based on the success of our sellers,” Etsy Chief Executive Officer Chad Dickerson said in an interview. “That means we don’t have to make a choice between people and profit.”

It’s an interesting proposition, in that a for-profit company (well, in theory, Etsy is, even if they’ve never made a profit,) pledges to some hippy-dippy concept of being for the public good as well as trying to make money.

And as the paper notes, it certainly is a test of the market:

It is also an experiment in corporate governance, a test of whether Wall Street will embrace a company that puts doing social and environmental good on the same pedestal with, if not ahead of, maximizing profits.

The co-founder of B Corp Jay Coen Gilbert explains further:

“B Corps are reaching a tipping point in market acceptance…The current shareholder model doesn’t meet the needs of entrepreneurs, business leaders and investors who want to make money and make a difference.”

Giving people jobs and creating shareholder and investor wealth doesn’t make a difference???…ok…then.

Etsy’s successful float may not however represent a huge confidence in the company versus a market that is desperately looking at companies to throw money at as the second great tech bubble continues to build momentum. Unless Etsy starts making money at some stage in the coming years, it’s unlikely to maintain such a high level of market support.

photo credit: Bubbles via photopin (license)