Etsy Inc (NASDAQ:ETSY) shares plummeted 14 percent on Tuesday in extended-hours trading after the online arts and crafts marketplace reported a loss for the April-June quarter that came as a surprise to investors.

Etsy ended the quarter with $268.2 million cash and marketable securities including $194.1 million in net proceeds from its initial public offering (IPO). The firm had revenue of $61.40 million for the quarter, compared to analysts’ expectations of $42.50 million.

In May, Wedbush analysts downgraded Etsy on concerns over counterfeit goods, which they found could make up 5% of all merchandise. Etsy has a 12-month low of $12.80 and a 12-month high of $35.74. They presently have a $23.00 price objective on the stock. Its total traded volume during last trading session was 3.87 million shares.

“There is a lot we can be proud of this quarter but at the same time we recognize that we must make continued investments in both mobile and growth in worldwide markets”, said Chief Executive Chad Dickerson on a call with analysts. Longer term, however, Etsy faces continuing anger from its community of sellers.

Etsy has been trying to maintain its edge as the leading site for unusual merchandise such as state-shaped cutting boards and cross-stitched subway maps, while fending off the pull of Amazon’s more mainstream appeal.

At the end of the quarter, Etsy had nearly 1.5 million active sellers (up from 1.4 million in the previous quarter) and 21.7 million active buyers (up from 20.8 million). Those sales rose 28.2% in the first quarter. This was a penny better than analysts expected. Etsy said it is spending heavily on marketing, which is eating into its bottom line, and will continue to spend more on marketing “in absolute dollars” to order to grow its business.

The price to earnings ratio, or the valuation ratio of a company’s current share price compared to its per-share earnings sits at N/A. This is an important indicator as a higher ratio typically suggests that investors are expecting higher future earnings growth compared to companies in the same industry with lower price to earnings ratios. With more than 10 times the number of active buyers, Amazon could attract some of Etsy’s prized manufacturers, despite higher seller fees.