Stubhub's IPO

Hiya kids, I don't really have anything to offer today so I will once again muse on my favorite subject, concert tickets and specifically the secondary market.

I don't know much about investing but I do know the other subject at hand quite intimately. A lot of people think they know but almost every internet comment I have ever seen on ticket resale has been completely wrong. So if you are considering buying into the Stubhub Initial Public Offering, read on.

I really had no idea how such a garbage company was able to claw itself out of the doldrums where Vivid was ruling the post-Covid roost and SeatGeek was rapidly ascendant back to around 40% secondary market share. Turns out, as Dave Wakeman from the excellent Talking Tickets newsletter and The Business Of Fun podcast pointed out, they spent in the neighborhood of $750 million on advertising last year. Yet it's apparent they have neglected setting aside a relative pittance for site infrastructure and to hire competent stateside front end support staff to handle the volume.

Unfortunately (or fortunately, depending on your point of view) I flamed out 2021/2022. I am so burned out on buying tickets I have bought only a handful in advance for the hundreds of events I have attended since. It's hard to put an exact time or have an easy exit with so many postponements but at some point I just completely excluded Stubhub from my feed as they are such a pain to deal with from any angle. Not sure that would be possible now.

There is no way Stubhub is worth the $16 billion valuation. No way it was even worth the $4.05 billion ViaGoGo paid for it.

LiveNation/TM and AEG have been doing everything they can to undermine and eliminate the secondary market in addition to any competition. There is no guarantee Stubhub will have the ability to sell billions of dollars worth of resale tickets a few years from now. Becoming a major player in the primary is little more than a pipe dream. Before the ticket marketplace was entirely globalized, promoters relied on brokers for risk mitigation. This was so obvious even a slightly developmentally disabled adult I know from concerts said 30 years ago Ticketmaster turns the fans into mini-Ticketmasters by selling them 8 tickets each. Now it seems they no longer need to employ that strategy, other than tricking amateurs into buying distressed inventory with "low ticket warnings." This is the point of a recent article in The Economist about resellers protecting the market in a financial downturn:

https://archive.ph/7ponH

Stubhub's main superpower was being on the ground floor in internet ticket resale and thus name recognition with geezers and in the process became synonymous with tickets themselves when in fact 90% of the exact same tickets can be found on other sites. I always prefer Tickpick first and VividSeats 2nd. Stubhub has about the highest out the door price. Made even worse that due to the hassles of dealing with the preponderance of issues seemingly exclusive to that site, many brokers set their point of sale to mark Stubhub tickets higher than other marketplaces to compensate for the perpetual inconveniences. 

To some it seems part of their business model is not paying sellers and allowing high risk for default listings with no verification because they can just fine the seller for non-delivery. Sale fulfilled or not, they profit. The latter happens on all marketplaces, but most have some sort of vetting process for sellers while Stubhub lets just anyone make a listing. A quick peek at the Stubhub Reddit suggests defaults are endemic. 

The company's disorganization continues to present itself in various ways. Last year I got a notice of cancellation for a 2020 show by someone who died in 2021. They will deduct from future sales, the last one being in 2021. Never heard from them again though I am sure some day I will. So they don't even know where their own money is. Not going out of my way to pay them back because I also got a notice of cancellation in 2023 for a show originally booked in 2020 that in fact took place in 2022.

Always most foreboding was changing technology and legal environment. When I first got serious in the prior decade as the McJob became less secure I was immediately dealing with the constant measure / counter measure with Ticketmaster and smaller box offices and it seemed to me my days were already numbered. I remember Google cracking down on AdWords manipulation in late 2017 (they seemed to have quickly relented) causing me a bit of concern because I found quite a hearty niche in non-Ticketmaster events where the primary vendor was buried in the search results.

also from Dave Wakeman's Talking Tickets! newsletter:

-------

I put this question to brokers in a private Facebook group.


Another professional reseller: “While their financials look stronger than Vivid their valuation is too high ..Also Eric Baker being given 90% of the voting rights is unfair to all the other shareholders”

--------

I said I don't understand investing but I think I understand this and I don't like it. There are quite a few more points of interest but I would point you to Talking Tickets numerous entries on the subject in the past few weeks and possibly other objective sources as well as Stubhub's own prospectus if wish to educate yourself. Like I said if you are interested in investing you really need to research it other than assume just because the eventsphere is always raging it's gotta be a safe bet. Vivid ruled the roost when it went public at $10 a share before quickly falling from it's perch and is now worth around $3.


(ps - if you click the link or subscribe and take exception to some of the things discussed here, save your ire for me, he mainly consults for box offices)

Selected sources:

https://talkingtickets.substack.com/subscribe

https://davewakeman.libsyn.com/ or The Business Of Fun via any major podcasting app

www.ticketnews.com

The proposed offering will be made only by means of a prospectus. Copies of the preliminary prospectus, when available, may be obtained from: J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717 or by email at prospectus-eq_fi@jpmchase.com and postsalemanualrequests@broadridge.com; and Goldman Sachs & Co. LLC, Attention: Prospectus Department, 200 West Street, New York, NY 10282, by telephone at (866) 471-2526, or by email at Prospectus-ny@ny.email.gs.com.