3 Stocks to Sell Before Earnings Season

Etsy: Gross merchandise sales fell 5.3% YoY in 2025 (Q4 ex‑Reverb +2.4%); stock is ~80% off highs and Etsy sold Depop to eBay for $1.2B after buying it for $1.625B in 2021, with active buyers/sellers and net income down. Nike: 3‑year revenue CAGR -2.27%, YTD share decline ~31%, Q3 FY26 revenue flat YoY with wholesale +5% offset by Nike Direct -4% and China sales down 7%; dividend yield ~3.6%. Tesla: 2025 revenue -3% YoY, auto sales -10%, GAAP net income attributable to shareholders down 46% and P/E >300, while company pivots toward AI/energy which remains unproved vs current valuation.

Analysis

Etsy’s current dynamic looks like a platform monetization squeeze: management is leaning on higher take-rates and ad load to prop revenue as underlying buyer/seller activity softens. That combination accelerates seller economics deterioration—higher CAC + lower take-home margins—pushing more sophisticated sellers toward direct-to-consumer stacks (Shopify) or niche vertical platforms, which erodes repeat purchase economics and personalization signal quality for the marketplace over a multi-quarter horizon.

For Nike the core risk is a channel-mix rot where short-term wholesale gains can mask long-term brand dilution if Direct (where margin and customer data live) continues to lag. That opens a durable share-shift opportunity for nimble regional players in China and performance-focused brands globally, and increases the chance of margin pressure from promotional inventory moves if Nike leans into wholesale sales to hit top-line targets.

Tesla’s strategic arc toward AI and energy is real optionality, but it’s rear-loaded: near-term P&L remains dominated by auto cycle swings, incentive cliffs, and regulatory/FSD execution risk. The practical winners from any acceleration in Tesla’s AI/robotics thesis are infrastructure and compute vendors (GPUs and silicon partners) and select battery tech suppliers—exposure to those is a cleaner way to play the theme than expensive, binary EV/robotics equity upside.

Across the three, expect volatility around the next series of quarterly updates; market moves will overreact to metric-level misses (GMV/active users, wholesale/direct splits, unit deliveries) and create asymmetric, tradeable windows. Position sizing should reflect binary event risk and the longer time needed for any platform or robotics optionality to de-risk.

Key Decisions for Investors

• Short ETSY via a 3-month put spread sized to 1–2% portfolio risk (buy puts / sell lower-strike puts) to capture further downside if seller churn and ad load depress GMV and conversion; hedge with a small long position in SHOP (or AMZN) to keep exposure to e-commerce upside — skewed payoff: limited premium risk for 2–3x upside on a material GMS miss.
• Long NVDA 6–12 month call spread to express secular compute demand from AI/robotics while limiting premium risk; offset by a small short INTC position (equity or calls) to favor GPUs over traditional CPU uplift – target asymmetric 3:1 reward/risk if AI deployments accelerate in industrial/auto.
• Short TSLA equity or buy a protective put spread with a 6–9 month horizon to express valuation sensitivity to execution misses in EV deliveries and FSD/robotics timelines; size modestly and hedge flow risk by pairing with long NVDA exposure to capture hardware upside without relying on Tesla’s execution.
• Construct a conservative Nike position: buy NKE with a 6–12 month protective collar (buy puts / sell covered calls) to collect cash returns while capping downside from channel/margin deterioration; remove collar and add exposure if successive quarters show Direct recovery or a clean inventory reset.