Shares of online craft store Etsy (ETSY - Get Report)  closed higher by 21.29% to $13.73 on more than fives times its normal trading volume on Tuesday, after activist hedge funds disclosed ownership and requested the company consider looking into strategic alternatives.

TPG Group Holdings disclosed a 4.3% stake in Etsy in a filing Monday with the Securities and Exchange Commission. In a separate filing, Dragoneer Investment Group reported a 3.7% stake.

"We are now reviewing our strategic and operational plans to ensure Etsy is focused on the most value-enhancing near- and long-term opportunities. We will prudently invest in areas that will deliver the greatest returns. At the same time, we see significant opportunities to scale our marketplace business model and drive efficiencies," Etsy CEO Josh Silverman said in a statement responding to the filings.

Silverman was appointed CEO two weeks ago and added that the company will provide further details when the review is complete.

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