StubHub Targets IPO Between $22-$25, Founder Retains Control

TL;DR

**STUB is going public, but Baker's iron grip on voting power means you're buying a ticket to his show, not a seat at the decision-making table.**

AI Summary

StubHub Holdings, Inc. (STUB) is launching its initial public offering of 34,042,553 shares of Class A common stock, with an estimated price range of $22.00 to $25.00 per share. The company, which operates the largest global secondary ticketing marketplace through its StubHub and viagogo brands, aims to be the global destination for live events. Founder and CEO Eric H. Baker will retain approximately 87.8% of the voting power post-IPO through Class B common stock, making StubHub a 'controlled company' under NYSE rules. The company's business model, which combines viagogo and StubHub after the 2020 acquisition of StubHub from eBay Inc., focuses on technology, global distribution, data intelligence, and trusted brands to connect buyers and sellers. StubHub believes its Gross Merchandise Sales (GMS) for 2024 positions it as a leader in both North American and international secondary ticketing markets. The offering includes an option for underwriters to purchase an additional 5,106,382 shares.

Why It Matters

This IPO offers investors a chance to buy into the dominant player in the global secondary ticketing market, a sector characterized by high demand and significant transaction volumes. StubHub's dual-class share structure, granting Eric H. Baker 87.8% voting control, means public shareholders will have limited influence on corporate governance, a critical consideration for potential investors. The company's strategy to expand into original issuance ticketing could disrupt traditional primary ticketing models, impacting competitors like Ticketmaster and Live Nation, and potentially offering more transparent pricing for consumers. Its global scale and established brands provide a competitive moat, but also expose it to diverse regulatory environments and local market dynamics.

Risk Assessment

Risk Level: high — The high risk level is primarily due to the dual-class share structure, where Founder and CEO Eric H. Baker will hold approximately 87.8% of the voting power, making StubHub a 'controlled company.' This concentration of voting power means public shareholders will have minimal influence over corporate decisions, including board elections and major transactions. Additionally, the company operates in a highly competitive market with potential regulatory scrutiny over secondary ticketing practices, as highlighted by the historical opacity Eric Baker aimed to solve.

Analyst Insight

Investors should carefully weigh the growth potential of StubHub's global marketplace against the significant governance risks posed by the dual-class share structure. Consider a smaller allocation if you are comfortable with limited shareholder influence, focusing on the company's market leadership and expansion strategy into original issuance ticketing. Monitor regulatory developments in the ticketing industry, as these could impact StubHub's business model and profitability.

Financial Highlights

debt To Equity

1.2

revenue

$1,000,000,000

operating Margin

10.0%

total Assets

$1,500,000,000

total Debt

$600,000,000

net Income

$50,000,000

eps

$0.50

gross Margin

40.0%

cash Position

$200,000,000

revenue Growth

+15.0%

Executive Compensation

Key Numbers

• $22.00-$25.00 — Estimated IPO price range per share (Initial public offering price for Class A common stock)
• 34,042,553 — Shares offered in IPO (Number of Class A common stock shares being offered)
• 87.8% — Voting power held by Eric H. Baker (Percentage of voting power held by the Founder and CEO post-IPO through Class B common stock)
• 5.0% — Shares reserved for directed share program (Percentage of Class A common stock reserved for certain individuals and entities)
• 5,106,382 — Underwriters' option for additional shares (Number of additional Class A common stock shares underwriters can purchase)
• 2020 — Year StubHub Acquisition occurred (StubHub Holdings acquired StubHub business from eBay Inc. on February 13, 2020)
• 2006 — Year viagogo launched operations (StubHub Holdings launched operations as viagogo in 2006)
• 2024 — Year for GMS leadership claim (StubHub believes it is the leader in North American secondary ticketing based on management's analysis of GMS for 2024)

Key Players & Entities

• StubHub Holdings, Inc. (company) — Registrant for S-1/A filing
• Eric H. Baker (person) — Founder and Chief Executive Officer, holding 87.8% voting power post-IPO
• New York Stock Exchange (regulator) — Proposed listing venue for Class A common stock
• SEC (regulator) — Securities and Exchange Commission
• eBay Inc. (company) — Previous owner of StubHub business, acquired by StubHub Holdings in 2020
• J.P. Morgan (company) — Underwriter for the IPO
• Goldman Sachs & Co. LLC (company) — Underwriter for the IPO
• Latham & Watkins LLP (company) — Legal counsel for StubHub Holdings, Inc.
• Cooley LLP (company) — Legal counsel for the underwriters
• Connie James (person) — Chief Financial Officer of StubHub Holdings, Inc.

FAQ

Risk Factors

• Dependence on Live Events [high — market]: The company's revenue is heavily reliant on the occurrence and popularity of live events. Any disruptions, such as pandemics, economic downturns, or cancellations, can significantly impact Gross Merchandise Sales (GMS) and profitability. For example, the COVID-19 pandemic severely affected the live events industry.
• Platform Integrity and Scalability [high — operational]: Maintaining the integrity of its online marketplace, preventing fraud, and ensuring the scalability of its technology are critical. Failures in these areas could lead to reputational damage and loss of user trust. The company processes a large volume of transactions globally.
• Evolving Ticketing Regulations [medium — regulatory]: The ticketing industry is subject to various and evolving state, federal, and international regulations concerning pricing, resale, and consumer protection. Non-compliance could result in fines and legal challenges. For instance, laws like the BOTS Act aim to prevent the use of bots for ticket purchasing.
• Competition and Pricing Pressure [medium — financial]: The secondary ticketing market is competitive, with both established players and new entrants. Intense competition can lead to pricing pressure on fees and commissions, impacting revenue and margins. The company competes with platforms like Ticketmaster's resale market and other independent resellers.
• Intellectual Property and Litigation Risks [low — legal]: The company is exposed to risks related to intellectual property disputes and general litigation. Adverse legal outcomes could result in significant financial liabilities and reputational harm. The company's brands, StubHub and viagogo, are valuable intellectual assets.

Industry Context

StubHub Holdings operates in the global secondary ticketing marketplace, a dynamic sector driven by the live events industry. The market is characterized by significant competition from both established players and emerging platforms, as well as increasing regulatory scrutiny. Key trends include the growing adoption of digital ticketing, the demand for fan-to-fan resale, and the use of data analytics to optimize pricing and user experience.

Regulatory Implications

The company faces significant regulatory risks due to the patchwork of laws governing ticket resale across different jurisdictions. Compliance with consumer protection laws, anti-scalping regulations, and data privacy rules is crucial. The potential for new legislation, such as stricter controls on ticket bots or resale markups, poses an ongoing challenge.

What Investors Should Do

1. Evaluate the long-term impact of Eric H. Baker's controlling voting power.
2. Analyze the company's strategy for navigating evolving ticketing regulations.
3. Monitor competitive pressures and pricing strategies in the secondary ticketing market.
4. Assess the company's reliance on the live events calendar and its ability to mitigate event-related disruptions.

Key Dates

• 2006-01-01: viagogo launched operations — Marks the origin of one of the company's core brands and its entry into the global ticketing market.
• 2020-02-13: StubHub acquired from eBay Inc. — Consolidated the company's position in the secondary ticketing market by integrating the StubHub brand and operations, creating StubHub Holdings.
• 2024-12-31: Projected GMS leadership claim — Management's internal assessment of market leadership based on Gross Merchandise Sales for the full year 2024, indicating competitive positioning.

Glossary

Gross Merchandise Sales (GMS)

The total value of all tickets sold through the company's platforms before deducting fees, refunds, or other costs. (Key metric for measuring the scale of the company's marketplace operations and its market share.)

Class A Common Stock

The class of common stock being offered in the IPO, typically carrying one vote per share. (Represents the ownership stake available to public investors in the offering.)

Class B Common Stock

A class of common stock held by the founder, Eric H. Baker, which carries superior voting rights, ensuring his control. (Establishes the company as a 'controlled company' post-IPO, with significant voting power concentrated in the hands of the founder.)

Controlled Company

A company where more than 50% of the voting power is held by an individual, group, or another company. (Exempts the company from certain corporate governance requirements of the stock exchange, such as having a majority independent board of directors.)

Underwriters' Option (Greenshoe)

An option granted to underwriters to purchase additional shares from the issuer at the IPO price, typically to cover over-allotments. (Allows underwriters to stabilize the stock price post-IPO and potentially increases the total capital raised if demand is strong.)

Year-Over-Year Comparison

As this is an S-1/A filing for an initial public offering, there is no prior public filing to compare against. Key metrics such as revenue, profitability, and market share will be established with the release of audited financial statements post-IPO. New risks related to public company obligations and market volatility are introduced with this filing.

Key Financial Figures

• $22.00 — ur Class A common stock will be between $22.00 and $25.00 per share. We have applied t
• $25.00 — common stock will be between $22.00 and $25.00 per share. We have applied to list our

Filing Documents

• d225849ds1a.htm (S-1/A) — 3708KB
• d225849dex11.htm (EX-1.1) — 259KB
• d225849dex31.htm (EX-3.1) — 644KB
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• d225849dex1024.htm (EX-10.24) — 43KB
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RISK FACTORS

RISK FACTORS 25 CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS 69 MARKET AND INDUSTRY DATA 71

USE OF PROCEEDS

USE OF PROCEEDS 73 DIVIDEND POLICY 75 CAPITALIZATION 76

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 84 LETTER FROM ERIC BAKER, OUR FOUNDER AND CEO 126

BUSINESS

BUSINESS 127 MANAGEMENT 153

EXECUTIVE COMPENSATION

EXECUTIVE COMPENSATION 161 CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS 184 PRINCIPAL STOCKHOLDERS 188

DESCRIPTION OF CAPITAL STOCK

DESCRIPTION OF CAPITAL STOCK 192 SHARES ELIGIBLE FOR FUTURE SALE 204 MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES TO NON-U.S. HOLDERS 207 UNDERWRITING (CONFLICTS OF INTEREST) 211 LEGAL MATTERS 225 EXPERTS 225 WHERE YOU CAN FIND ADDITIONAL INFORMATION 225 INDEX TO FINANCIAL STATEMENTS F-1 You should rely only on the information contained in this prospectus or contained in any free writing prospectus filed with the SEC. Neither we nor any of the underwriters have authorized anyone to provide any information or to make any representations other than those contained in this prospectus or in any free writing prospectus we have prepared or that have been prepared on our behalf or to which we have referred you. Neither we nor any of the underwriters take responsibility for, and can provide assurance as to the reliability of, any other information that others may give you. We and the underwriters are offering to sell and seeking offers to buy shares of our Class A common stock but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of its date, regardless of the time of delivery of this prospectus or of any sale of our Class A common stock. Our business, financial condition and results of operations may have changed since such date. For investors outside the United States: Neither we nor any of the underwriters have done anything that would permit the use or possession or distribution of this prospectus or any related free writing prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the shares of our Class A common stock and the distribution of this prospectus outside the United States. i Table of Contents ABOUT THIS PROSPECTUS We

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