StubHub Shares Sink 35%, but Does This $7.3 Million Bet Suggest a Turnaround Is Looming?

Core Viewpoint - RPM Capital Partners has initiated a new position in StubHub Holdings, acquiring 535,850 shares valued at $7.25 million, representing a significant investment in the company amidst a challenging IPO environment [2][3][10]. Company Overview - StubHub Holdings is a leading technology company specializing in secondary ticketing for live events, facilitating millions of ticket transactions annually through its digital platform [6][8]. - As of the latest report, StubHub's market capitalization stands at $5.58 billion, with a revenue of $1.83 billion and a net income of -$1.32 billion [5]. Financial Performance - In the latest quarter, StubHub reported $2.4 billion in gross merchandise sales, an 11% increase year over year, and $468 million in revenue, up 8% [11]. - Adjusted EBITDA rose by 21% to $67 million, despite a significant one-time stock-based compensation charge of $1.4 billion related to the IPO [11]. - The company's net leverage improved to 3.9 times adjusted EBITDA following a $750 million debt reduction, enhancing balance sheet flexibility [11]. Investment Implications - RPM Capital Partners' investment in StubHub, which constitutes 6.36% of its reported U.S. equity assets, indicates a strategic focus on companies with solid underlying marketplace economics despite market volatility [4][10]. - The addition of StubHub as a significant position alongside Semrush suggests a selective expansion strategy rather than a shift in investment style, contrasting with other managers reducing exposure to rate-sensitive assets [12].