StubHub IPO: Priced at $23.50, Valuing Company at $8.6 Billion
StubHub, the online ticket platform, is set to launch its IPO priced at $23.50 per share, valuing the company at $8.6 billion. This move marks a significant step for the company, which has been navigating the complexities of the public market for several years.
IPO Details and Market Debut
The IPO pricing falls at the midpoint of the expected range provided by StubHub last week. The company confirmed in a release that its shares are expected to begin trading on the New York Stock Exchange (NYSE) on Wednesday under the ticker symbol "STUB." This launch signifies a major milestone after multiple delays.
Background and Company History
Based in San Francisco, StubHub was co-founded by Eric Baker in 2000. eBay acquired the company for $310 million in 2007. In 2020, Baker reacquired StubHub for approximately $4 billion through his company Viagogo, a European ticket marketplace. This reacquisition set the stage for StubHub's renewed focus on growth and eventual IPO.
Navigating Market Volatility
StubHub's journey to the public market has been fraught with challenges. The company delayed its public debut twice, most recently in April due to market disruptions caused by President Donald Trump's "Liberation Day" tariffs. An updated prospectus was filed in August, effectively restarting the IPO process. The recent resurgence in the IPO market, following a period of high inflation and rising interest rates, has paved the way for StubHub's launch.
Financial Performance and Future Outlook
StubHub reported in its updated prospectus that first-quarter revenue increased by 10% year-over-year to $397.6 million. Operating income for the period was $26.8 million. However, the company's net loss widened to $35.9 million from $29.7 million a year prior. Despite this loss, investors are keenly watching StubHub's growth trajectory and its plans to expand into direct ticket sales. Some analysts are observing that the recent IPOs have been 'frothy'.
StubHub IPO Puts Direct Ticket Sales Plan in the Spotlight
As StubHub Holdings Inc. prepares for its initial public offering, the company is highlighting its strategic plan to expand its business by selling new tickets for sports and other live events. This initiative aims to diversify StubHub's revenue streams and tap into a larger market opportunity.
Focus on Direct Issuance
In a presentation to investors, CEO Eric Baker and CFO Connie James emphasized the company’s plans to grow beyond reselling tickets into primary sales, termed "direct issuance." StubHub views the direct ticket sales market as a $153 billion opportunity, significantly larger than the secondary market that currently constitutes its core business. They also believe this segment is more resilient to regulatory and competitive pressures.
Early Stages of Direct Sales Expansion
StubHub's foray into new ticket issuance is still in its initial phases, accounting for just over $100 million of its $8.7 billion in gross ticket sales last year. A significant portion of these direct sales stemmed from 2024 World Series tickets, resulting from a partnership established with the New York Yankees in 2023. Baker stated, "We are only scratching the surface of this opportunity," indicating the potential for substantial growth in this area.
Comparison to Other Consumer Platforms
Management has sought to position StubHub alongside other consumer platforms, such as Etsy Inc and Shopify Inc. According to James, StubHub possesses "a highly enviable financial model with double-digit growth, strong margins and great cash flow dynamics, all of which is similar to other scaled leading consumer marketplaces."
Analyst Concerns and Profitability Challenges
However, Bloomberg Intelligence analyst Kevin Near expressed reservations, stating, "Almost all their tickets are not exclusive to their platform so you don’t really get any brand loyalty from that aspect." Near also highlighted concerns about StubHub's substantial spending on sales and marketing, as well as questions regarding its ability to achieve long-term profitability targets. The company’s Ebitda margins have declined in recent periods, falling from 26% in 2023 to 17% last year and 12% in the first half of 2025. StubHub has attributed this decline to increased investments in securing market share within the direct issuance market. These figures are below the company’s stated long-term adjusted Ebitda margin target of 35% to 40% presented in the marketing presentation.
