StubHub (STUB) Plunges 6.82% Amid Post-IPO Struggles, Rising Debt, and Regulatory Pressures

StubHub (STUB) plunged 6.82% on Thursday, marking its second consecutive day of losses, with the stock now down 12.77% over the past two sessions. The share price hit an intraday low, declining by 9.09% at one point, as investor sentiment remains fragile following the company’s underwhelming market debut.

The recent sell-off reflects broader concerns over StubHub’s financial health and operational challenges. Post-IPO, the stock opened at $22, a 6.38% drop from its $23.50 offering price, signaling immediate skepticism about its $8.6 billion valuation. Rising debt burdens, including $2.38 billion in long-term obligations, have amplified worries about the company’s ability to sustain profitability. Despite reporting $1.77 billion in revenue for 2024, first-half 2025 results showed a 3% revenue slowdown and a $76 million net loss, underscoring margin pressures from escalating expenses tied to technology and marketing.

Regulatory and consumer-related risks further weigh on the stock. StubHub’s controversial pricing practices, including hidden fees and a $20 million settlement with California authorities, have drawn scrutiny. The Federal Trade Commission’s new “junk fees” rule, effective in May 2025, now mandates transparent pricing, potentially eroding demand for its platform. Additionally, state-level restrictions on reselling tickets above face value and ongoing antitrust investigations pose operational uncertainties. A Net Promoter Score of -100 and an F rating from the Better Business Bureau highlight persistent customer dissatisfaction, complicating efforts to retain market share.

Competitive pressures also loom large. Rivals like Vivid Seats trade at a fraction of StubHub’s valuation—0.59x revenue versus 4.9x for StubHub—raising questions about its premium pricing. While StubHub has expanded into primary ticketing, generating $100 million in gross merchandise sales in 2024, this diversification remains unproven against entrenched players like Live Nation. The company’s reliance on discretionary spending for concerts and events leaves it vulnerable to macroeconomic shifts, such as inflation or recession, which could dampen live event demand.

Corporate governance concerns add to investor unease. CEO Eric Baker controls 90% of voting power through a dual-class share structure, despite owning just 5.2% of economic equity. This power imbalance raises fears of decisions favoring short-term gains over long-term value creation, particularly amid StubHub’s history of unprofitability. Delays in its IPO process since 2022, driven by economic uncertainty, have further eroded confidence in its strategic execution. With the stock trading below its offering price, analysts caution that regulatory enforcement, competitive erosion, and governance risks could prolong volatility until the company addresses its structural challenges.