StubHub IPO Puts Direct Ticket Sales Plan in the Spotlight

Core Viewpoint - StubHub Holdings Inc. is preparing for a US initial public offering (IPO) with plans to expand its business into primary ticket sales, aiming to raise up to $851 million, amidst strong demand for its offering [1][3]. Group 1: Business Expansion - The company is transitioning from primarily a secondary ticket marketplace to include direct ticket sales, identifying a $153 billion opportunity in this market, which is perceived as less vulnerable to regulatory and competitive risks [3][4]. - StubHub's direct ticket sales generated over $100 million last year, a small fraction of its total gross ticket sales of $8.7 billion, with significant contributions from a partnership with the New York Yankees for the 2024 World Series tickets [4]. Group 2: Financial Performance - The company has reported declining EBITDA margins, which fell from 26% in 2023 to 17% last year, and further to 12% in the first half of 2025, attributed to increased spending on market share acquisition in the direct issuance market [9]. - StubHub's long-term adjusted EBITDA margin target is set between 35% to 40%, which is significantly higher than its current performance [9]. Group 3: Market Position and Comparisons - Management has compared StubHub to other consumer platforms like Etsy and Shopify, highlighting its financial model characterized by double-digit growth, strong margins, and favorable cash flow dynamics [6][7]. - However, analysts express skepticism regarding brand loyalty due to the non-exclusive nature of the tickets sold on the platform, alongside concerns about high sales and marketing expenditures impacting long-term profitability [8].