NEW YORK, NEW YORK – APRIL 18: The StubHub logo is seen in a former store on April 18, 2024 in New York City. StubHub, the online ticketing service, is looking for a potential summer initial public offering with a a valuation of at least $16.5 billion. (Photo by Michael M. Santiago/Getty Images)
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Wall Street is not offering its best products to IPO investors this month.
Consider StubHub, which priced its IPO at an $8.6 billion valuation – a 7% dip from the previous week’s estimate, CNBC reported.
While StubHub stock could rise at the IPO – especially if the offering is oversubscribed – consumer backlash, regulatory pressure, competitive threats, deteriorating profitability, high debt, an unfriendly shareholder structure and a high valuation compared with rivals make $STUB particularly risky.
Two possible scenarios:
If StubHub builds a successful primary ticketing service and expands its profit margins — an unlikely outcome at the moment — the company could be worth $15 billion. More likely, regulatory and competitive pressures could send down the company’s valuation to match rival Vivid Seats’ sub-$500 million.
A mid-point scenario would send StubHub’s valuation down — between $4 billion and $6 billion within 12 months – making me think investors may not want to rush into this stock.
StubHub’s IPO Strategy
StubHub is optimistic about the company’s position and prospects. “We believe we operate the largest global secondary ticketing marketplace for live events,” according to StubHub’s IPO prospectus.
“Our business model has achieved scale with high growth and generated significant revenue, profit and cash flow. We connect fans around the world with sellers who use our marketplace to reach passionate fans and price tickets efficiently,” the prospectus said.
StubHub’s Business And Financial Results
Founded in 2000, New York-based StubHub operates a marketplace allowing fans to purchase tickets for live events – more than 40 million tickets sold in 2024 across at least 200 countries.
StubHub’s growth is slowing and the company is unprofitable. For the six months ending June 2025, StubHub’s revenue grew 3% to $828 million – a sharp slowdown from 2024 when the company’s revenue increased 30%, according to StubHub’s prospectus, which noted that StubHub’s net loss in the first half of the year soared 217% to $76 million.
Since its founding, StubHub has changed ownership a few times, and suffered a significant drop in its valuation. Eric Baker co-founded the company and sold it to eBay for $310 million in 2007. In 2020, he paid $4 billion to buy back StubHub through his new company, Viagogo, a European ticket marketplace, CNBC reported.
StubHub has been trying to go public for the past several years, but delayed its public debut many times. In 2022, StubHub tried to go public via a direct listing at more than $13 billion valuation, Bloomberg News reported.
In 2024, StubHub sought to go public at a $16.5 billion valuation; the company squelched that effort. Then in 2025, Baker tried again, pulling the plug in April after President Donald Trump announced his tariffs. Last week, StubHub was aiming for a $9.2 billion valuation, which on Tuesday was lowered by 7%.
Where Will StubHub Stock Go?
StubHub faces significant challenges to its business, which could send the stock down. These hurdles include consumer complaints, regulatory issues, high debt, a shareholder unfriendly structure and a high value compared to rivals.
Here are more details about StubHub’s business challenges:
Consumer Complaints
StubHub’s fees are high and often unpopular, and its customer service is poorly rated. StubHub long used “drip pricing” adding fees of 30% to 40% on top if the listed price, only revealing these fees at checkout, according to a report by cbsnews.com.
During the Covid-19 pandemic, StubHub suspended its cash-refund policy for canceled events – offering only credits – despite its prior guarantee of full refunds, noted oag.ca.gov. StubHub ultimately settled with California’s attorney general, offering $20 million in cash refunds to more than 45,000 customers.
Consumers give StubHub low ratings. The company’s Net Promoter Score of -100, meaning every surveyed customer was a detractor. That is among the worst ever recorded score for a major consumer platform, according to ResellerRatings. The Better Business Bureau assigns StubHub an F rating with 72 unresolved complaints.
Regulatory Issues
Regulators are aiming to stop StubHub’s “junk fees” and to protect consumers. Indeed California is requiring the company to disclose those fees upfront which could crimp demand when consumers realize how much they will have to pay before the purchase process begins. The FTC’s new junk fees rule, effective May 2025, mandates all-in pricing which could eliminate StubHub’s current revenue model, noted National Law Review, forcing the company to face a 10% growth headwind, according to Digital Music News.
High Debt
StubHub carries $2.38 billion in long-term debt, which contributed significantly to the widening losses through interest expenses. The company’s debt-to-earnings before interest, taxes, depreciation, and amortization ratio of 15.01 x and debt-to-free cash flow ratio of 11.91 x indicate worrying leverage levels – thus pressuring the company should an economic downturn occur, reported Billboard.
Unfriendly Shareholder Structure.
Baker, the CEO, will retain 90% voting control through a dual-class structure despite owning only 5.2% of economic shares, noted Variety. This overwhelming voting control means Baker will likely remain CEO regardless of how well the company performs.
High Value Compared to Rivals
StubHub is grossly overvalued at 4.9 times 2024 revenue of $1.77 billion. Rival Vivid Seats trades at just 0.59 times revenue despite similar business models, while Live Nation, about which I wrote in a 2024 Forbes column, trades at 1.4 times.
Conclusion
It is difficult to make an optimistic business case for StubHub – unless there is a revival in major concerts by artists such as Taylor Swift and Beyonce. “Even as StubHub makes a renewed push to go public, its business isn’t expanding as quickly as it had hoped,” noted The Information.
In the first half StubHub missed the revenue and profit projections it shared with lenders earlier this year, in part due to all-in ticket pricing rules. “The shortfall highlights the volatile nature of the ticketing industry, which is heavily dependent on the flow of major concerts, something outside of StubHub’s control,” wrote the Information.
I do not see a reason to buy stock in StubHub. If shares fall enough, consider buying the shares in case the most popular artists announce new tours.
