StubHub IPO lawsuit could bring investor pain, potential fan gain

Core Viewpoint - StubHub is facing legal challenges following its $758 million IPO due to allegations of failing to disclose significant financial risks to investors, particularly regarding cash flow issues [3][4][6]. Company Overview - StubHub is a leading player in the secondary ticket market, selling over 40 million tickets through more than 1 million unique sellers globally in 2024 [2]. - The company reported an annual revenue of approximately $1.77 billion for 2024, with gross merchandise sales (GMS) of about $8.7 billion [5]. Financial Performance - For Q3 2025, StubHub reported revenue of $468.1 million, with GMS for the quarter reaching $2.4348 billion, reflecting an 11% year-over-year increase [5]. - The company experienced a net loss of $1.294 billion in Q3 2025, primarily due to a one-time stock-based compensation charge related to the IPO [6]. - Free cash flow for Q3 2025 was negative $4.6 million, a decline from positive $10.6 million in the same quarter the previous year [8]. Legal Challenges - A class action complaint filed in federal court alleges that StubHub's registration statement was misleading and omitted critical information about its financial health [4][6]. - At least eight law firms are investigating StubHub's financial disclosures and the IPO process, indicating a broader scrutiny of the company's practices [7].