Ticket platform StubHub Holdings goes up for sale
In the world of live entertainment, StubHub Holdings, Inc. (NYSE:STUB) has been a global destination for experiences since its inception in 2000. Founded by Eric Baker, the company has grown significantly over the years, expanding its reach and infrastructure through strategic acquisitions.
In 2007, StubHub was bought by eBay, which helped boost its global presence. Fast forward to 2019, StubHub was acquired by Viagogo in a $4 billion deal. This move was initiated by Mr. Baker, who left StubHub around the same time and founded Viagogo to address its international availability issues.
StubHub's IPO was held in 2024, with the company aiming to sell 34.0 million shares at a price range between $22 and $25 per share. The final pricing for the IPO was set at $23.50 per share. After the first day of trading, the company's valuation was around $8 billion.
However, the company's financial performance has shown some lumps. In 2022, StubHub reported an operating loss of $217 million, but revenues increased to $1.37 billion, up 32%. This growth was not sustained, as revenues fell slightly year-over-year in the second quarter of 2023, resulting in a lumpy overall performance.
Despite the challenges, StubHub's gross merchandise sales were up 11% to $4.38 billion in 2023. However, the company's cut of ticket sales prices fell to 18.9%. This decrease in profit margin is a concern for the company, which has an equity valuation of $8.6 billion at the offer price, with nearly 368 million shares outstanding following the offering.
The company's revenues saw a surge again in 2024, reaching nearly $1.77 billion, but operating profits fell to $138 million. In the first half of 2024, momentum cooled significantly, with revenues up just over 3% and GAAP operating profits of $52 million.
Despite these financial challenges, StubHub continues to focus on technology-enabled marketplace features to bring liquidity, transparency, and efficiency to ticket sales. The company has sold over 40 million tickets, with over a million sellers, across 200 countries.
Since its IPO, StubHub has seen a 10% loss in its share price. In 2023, however, the company reported a huge GAAP operating profit of $253 million, aided by strict cost control and lower sales & marketing efforts. This profitable year marked a significant turnaround for the company, offering hope for a more stable financial future.
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