Etsy (NYSE: ETSY) adds time-based fees to $1.2B Depop sale
Filing Impact
Filing Sentiment
Form Type
8-K
Rhea-AI Filing Summary
Etsy, Inc. has signed a new letter agreement with eBay Inc. adjusting terms of the planned sale of Depop Limited. eBay previously agreed to acquire all outstanding equity of Depop for approximately $1.2 billion, with the price subject to capped adjustments for certain pre‑closing investments and other agreed items.
The transaction is now expected to close by the end of the third quarter of 2026, later than the prior expectation of the second quarter. The purchase agreement requires eBay to pay Etsy a $90 million termination fee if regulatory clearances are not achieved and, in certain other termination scenarios, an additional $70 million fee.
The new letter agreement is designed to support continued investment in Depop during the extended pre‑closing period. It also provides for an additional fee payable by eBay to Etsy if the purchase agreement is validly terminated (other than for certain willful breaches or fraud by Etsy), ranging from $0 if termination occurs on or before June 15, 2026 to $136 million if termination occurs after July 31, 2026.
Positive
- None.
Negative
- None.
Insights
Etsy and eBay amended the Depop sale, extending timing and strengthening Etsy’s termination protections.
The agreement confirms eBay’s plan to buy all Depop equity for approximately $1.2 billion, while acknowledging closing is now expected by the end of Q3 2026 instead of Q2. This lengthens uncertainty around when Etsy will actually receive proceeds and deconsolidate Depop.
The existing purchase agreement already included a $90 million fee if regulatory clearances fail and an additional $70 million fee for specified termination events. The new letter agreement adds a time‑based extra fee, up to $136 million for terminations after July 31, 2026, excluding certain willful breaches or fraud by Etsy.
These features increase potential compensation to Etsy if the deal collapses after a prolonged pre‑closing period, while allowing Etsy and Depop to keep investing to maintain Depop’s competitiveness. Actual financial impact depends on whether the transaction closes as planned or triggers any of the termination scenarios.
8-K Event Classification
Item 9.01 — Financial Statements and Exhibits
1 item
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
Depop purchase price: $1.2 billion
Regulatory termination fee: $90 million
Additional termination fee: $70 million
+3 more
6 metrics
Depop purchase price
$1.2 billion
Approximate consideration for all outstanding equity interests
Regulatory termination fee
$90 million
Payable by eBay if regulatory clearances fail
Additional termination fee
$70 million
Payable by eBay upon certain termination events
Extra time-based termination fee
Up to $136 million
Payable if termination occurs after July 31, 2026
Expected closing timing
End of Q3 2026
Updated expectation for Depop transaction close
Zero extra fee cutoff
June 15, 2026
No extra fee if termination on or before this date
Key Terms
Material Definitive Agreement, Sale and Purchase Agreement, termination fee, regulatory clearances, +1 more
5 terms
Material Definitive Agreement regulatory
"Item 1.01. Entry into a Material Definitive Agreement."
A material definitive agreement is a legally binding contract that creates major, long‑term obligations or rights for a company, such as loans, asset sales, mergers, or supplier deals. Think of it like a mortgage or lease for a business: it can change future cash flow, risk and control, so investors watch these agreements closely because they can materially affect a company’s value, financial health and stock price.
Sale and Purchase Agreement financial
"in connection with the previously announced Sale and Purchase Agreement, dated as of February 15, 2026"
A sale and purchase agreement is a binding written contract that sets out the exact terms under which one party sells and another buys assets or a business, much like the detailed receipt and instructions you get when buying a house. It matters to investors because it defines the price, what is included, payment timing, and any promises or protections — all of which determine future cash flows, risk, and the value of the companies involved.
termination fee financial
"Purchaser will be required to pay Etsy a termination fee of $90 million"
A termination fee is a payment required if one party ends a contract before its agreed-upon end date. It acts like a penalty or compensation to the other party for canceling early, similar to a fee you might pay for breaking a lease or canceling a service contract. For investors, it matters because it can influence a company's decisions and financial obligations related to ending agreements prematurely.
regulatory clearances regulatory
"terminated as a result of a failure to achieve certain regulatory clearances"
Regulatory clearances are official approvals from government agencies that allow a medical product, device, drug or other regulated offering to be marketed or sold. Think of it like a safety inspection and license: it signals the product meets required safety and effectiveness standards, which can unlock revenue, reduce legal and market risk, and change a company’s growth timeline—information investors use to assess future sales and risk.
Letter Agreement financial
"entered into a letter agreement (the "Letter Agreement") with eBay Inc."
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________________________
FORM 8-K
_____________________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 21, 2026
(Exact name of registrant as specified in its charter)
_____________________________________
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||||||||||||
(Address of principal executive offices, including zip code)
(718 ) 880-3660
(Registrant's telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
_____________________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. □
1
Item 1.01. Entry into a Material Definitive Agreement.
On May 21, 2026, Etsy, Inc., a Delaware corporation ("Etsy"), entered into a letter agreement (the "Letter Agreement") with eBay Inc., a Delaware corporation ("Purchaser"), in connection with the previously announced Sale and Purchase Agreement, dated as of February 15, 2026 (the "Purchase Agreement"), between Etsy and Purchaser, pursuant to which Purchaser agreed to acquire all of the outstanding equity interests of Depop Limited (“Depop”), a wholly-owned subsidiary of Etsy, from Etsy (the "Transaction").
As announced on April 29, 2026, the parties expect the Transaction to close by the end of the third quarter of 2026, rather than the prior expectation of the second quarter of 2026.
As previously disclosed, the purchase price of approximately $1.2 billion will be adjusted, up to a specified cap, for certain investments Etsy and Depop may, in their sole discretion, make in the Depop business prior to the closing of the Transaction, along with certain other adjustments specified in the Purchase Agreement. The Purchase Agreement provides that Purchaser will be required to pay Etsy a termination fee of $90 million if the Purchase Agreement is terminated as a result of a failure to achieve certain regulatory clearances. The Purchase Agreement provides further that, upon certain termination events, Purchaser will be required to pay Etsy an additional termination fee of $70 million.
In light of the duration of the pre-closing period for the Transaction, the Letter Agreement is intended to enable Etsy and Depop to make continued investments, in their sole discretion, to maintain the competitiveness of the Depop business. The Letter Agreement provides that, if the Purchase Agreement is validly terminated (other than as a result of a willful breach by Etsy of certain of its obligations under the Purchase Agreement or Etsy's fraud), Purchaser will pay Etsy an additional fee in an amount that depends on the date of such termination, ranging from $0 if such termination occurs on or before June 15, 2026 to $136 million if such termination occurs after July 31, 2026.
The foregoing description of the Letter Agreement is not complete and is qualified in its entirety by reference to the full text of the Letter Agreement, which is attached hereto as Exhibit 2.1 and is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
| Exhibit No. | Description | ||||
2.1 | Letter Agreement, dated May 21, 2026, by and between Etsy, Inc. and eBay Inc. | ||||
| 104 | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document | ||||
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
ETSY, INC.
By: /s/ Colin Stretch
Colin Stretch
Chief Legal Officer
Dated: May 28, 2026
3
FAQ
What deal did Etsy (ETSY) update with eBay in this 8-K filing?
Etsy updated terms of its planned sale of Depop Limited to eBay. eBay agreed to acquire all outstanding Depop equity for approximately $1.2 billion, under a previously announced sale and purchase agreement dated February 15, 2026.
When is Etsy now expecting the Depop sale to eBay to close?
Etsy and eBay now expect the Depop transaction to close by the end of the third quarter of 2026. This is later than the prior expectation that closing would occur in the second quarter of 2026, extending the pre‑closing period.
What termination fees could eBay owe Etsy if the Depop sale fails?
Under the purchase agreement, eBay must pay Etsy a $90 million termination fee if regulatory clearances are not achieved, and an additional $70 million upon certain other termination events, providing significant compensation protections if the transaction does not complete.
What new fee did the letter agreement add for terminating the Depop deal?
The letter agreement adds an extra fee payable by eBay to Etsy if the purchase agreement is validly terminated, other than for specified Etsy misconduct. This fee ranges from $0 for terminations on or before June 15, 2026 to $136 million after July 31, 2026.
Why did Etsy and eBay sign a new letter agreement regarding Depop?
They signed the letter agreement to address the longer pre‑closing period and allow Etsy and Depop to keep investing to maintain Depop’s competitiveness. It also adjusts termination fee arrangements so Etsy may receive additional compensation if the transaction is terminated after specific dates.
How does the Etsy 8-K describe investments in Depop before closing?
The filing states the purchase price will be adjusted, up to a specified cap, for certain investments Etsy and Depop may, in their sole discretion, make in Depop before closing. These adjustments are part of the agreed purchase price mechanisms in the sale agreement.