Founded right at the start of the millennium in 2000, StubHub is set to debut on the exchanges tomorrow, Sept. 17. Set to trade under the ticker “STUB,” StubHub is the foremost name when it comes to secondary ticket sales. It operates an online marketplace for buying and reselling tickets to live events such as sports, concerts, theater, etc. It allows sellers (from individuals to brokers) to list tickets and buyers to purchase with protections (such as guarantees).

Current CEO Eric Baker has had quite a journey with StubHub, which he co-founded with Jeff Fluhr. After being removed by the board, he went on to establish another secondary ticketing platform in Europe called Viagogo, as StubHub went on to be sold to eBay (EBAY) in 2007 for $310 million. Eventually, Baker made a comeback at StubHub after Viagogo acquired it in 2019 from eBay for roughly $4.05 billion.

About the IPO

StubHub is looking to raise around $850 million by offloading 34,042,553 Class A shares with an expected price range of $22 to $25 per share, implying an overall value of about $9.2 billion. The company intends to use a part of the net proceeds to reduce its debt under its line of credit. The remainder is to be used for general corporate purposes, including working capital, operating expenses, and capital expenditures.

Sounding bullish about the IPO, CEO Baker stated:

“We believe we operate the largest global secondary ticketing marketplace for live events. Our global scale and the core capabilities of our marketplace enabled us to establish a leadership position and build durable competitive moats in secondary ticketing, and our focus is set on an even bigger opportunity. Through our marketplace, we are transforming the way tickets are discovered, accessed, priced and sold.”

So, does a fascinating comeback story, and an almost doubling of valuation in six years, warrant investors flocking towards the StubHub IPO? Let's analyze.

Rocking Financials (With a Net Loss Glitch)

From reporting gross merchandise sales (GMS) of $4.8 billion in 2022, as live events started to gather momentum after two years of pandemic turmoil, StubHub saw its GMS almost double to close at $8.7 billion in 2024. In the same period, revenues grew to $1.8 billion in 2024 from about a billion dollars in 2022. However, in terms of profitability, the company's record has room for improvement.

While a net income of $405.2 million was reported in 2023, in 2021 and 2024, the company reported net losses of $261 million and $2.8 million, respectively.

However, StubHub is a company that generates positive cash flow from operations. Net cash flow from operating activities turned to a positive $261.5 million in 2024 from a negative $47.5 million in 2022. Free cash flow followed the same trajectory, with a negative value of $49.8 million in 2022 and a positive value of $255.1 million in 2024.

Yet, the company's cash balance at the end of 2024 of about a billion dollars was half of its long-term debt levels of $2.3 billion. Having said that, StubHub has a negative working capital balance of $1.04 billion. This means that the company can circulate cash efficiently by delaying payments to creditors while quickly collecting the same from debtors.

Looking at the larger picture, StubHub’s international footprint continues to grow, allowing people across more than 200 nations and regions to purchase tickets in 33 languages and 48 currencies. In 2024 alone, its platform facilitated access to events spanning over 90 countries worldwide.

Aiming to Be the Hub of Live Events

StubHub values its North American secondary ticketing business at approximately $17.5 billion, but its ambitions extend well beyond resales. The company has set its sights on becoming a comprehensive destination for live events, spanning primary ticket issuance, advertising (a $19 billion market), sports merchandising (worth $32 billion), sports betting (estimated at $93 billion), and leisure attractions and experiences (a $387 billion opportunity). In 2024, it began to make inroads into primary ticketing with about $100 million in direct sales already recorded.

A central element of StubHub’s expansion strategy is to sign more rights holders who will make the platform their main outlet for initial ticket sales. Recent agreements with the Association of Volleyball Professionals and the Outside Lands festival reflect this approach. In the AVP arrangement, StubHub is handling the first issuance of tickets rather than simply facilitating resales, enabling it to capture a larger share of the ticketing value chain.

The company is also developing new revenue channels around its core marketplace. In advertising, it is monetizing visitor traffic through promoted listings, display placements, and brand collaborations. For sports merchandising, StubHub plans to use its distribution network and fan base to sell team apparel. For concerts, memorabilia, and similar items in partnership with content owners. In the sports betting arena, the platform is evaluating data partnerships, sponsorships, and lead-generation opportunities to leverage its traffic base.

Beyond tickets for sports and music events, StubHub envisions entering the wider market for tours, attractions, and museums. Management believes its global brand recognition, digital infrastructure, and audience reach can be applied to the experiences segment as effectively as it has been to ticketing.

Still, the company faces stiff competition from entrenched players across each of these areas. Live Nation’s (LYV) Ticketmaster is a serious competitor in secondary ticketing. Meanwhile, DraftKings (DKNG) and Fanatics already hold major positions in sports betting, while the online advertising ecosystem is dominated by Meta (META) and Alphabet (GOOG) (GOOGL), which remain formidable rivals.

Further, heightened dependence on certain events of the ilk of the Eras Tour of Taylor Swift and an increasing tendency of reduced discretionary spending among the public due to an uncertain economic future are also wider headwinds that the company should not lose sight of as well.

Final Take

StubHub has made a name for itself by creating a brand that is synonymous with secondary ticket sales. Its primary focus should be on growing this business while protecting its turf. Although the company's move towards the direct issuance market is a natural progression and may seem to be a strategic fit, its efforts towards developing other businesses such as advertising, merchandising, etc., should be limited, as the risk of spreading itself too thin remains over there, along with the added pressure of competing with giants in those respective industries.

Financially, StubHub looks solid. Even though the net losses are certainly a concern, its effective working capital management, increasing cash flow from operating activities, and, most importantly, rising revenues make StubHub a suitable investment candidate, provided it does not take its eye off the ball.