Was StubHub a one-hit wonder?

StubHub is learning the hard way that this year’s IPO renaissance doesn’t mean investors are throwing scrutiny to the wind.

After reporting earnings last night, the ticket seller opted out of providing a financial forecast for the current quarter. Management said the reason was that the company was taking a “long-term” approach. StubHub CEO Eric Baker later elaborated that it’s challenging for StubHub to predict consumer demand because the timing of tickets can shift quarter to quarter.

Shareholders called BS. Any time a company refuses to provide guidance is cause for concern, and the stock tumbled 20.99% today as investors wondered what management doesn’t want to say.

The news overshadowed StubHub’s earnings yesterday, in which the company beat Wall Street expectations for Q3 revenue, but disclosed a net loss of $1.33 billion due to a one-time stock-based compensation charge from its IPO, according to CNBC.

Investors are changing their tune

When StubHub went public in September, the IPO market was roaring back to life. StubHub was one of the most highly anticipated debuts of the year—its IPO was oversubscribed and the company raised $800 million. But StubHub’s performance hasn’t been up to investors’ high bar: since going public, shares have tanked 36.7%.

Part of the issue is that there aren’t currently any hugely popular concerts like Taylor Swift’s Eras Tour, leaving investors concerned about whether the company can keep growing at the same rate it did last year. There’s also plenty of competition from other companies like Vivid Seats and SeatGeek eating into StubHub’s business. On top of all that, investors aren’t pleased about that hefty loss from the IPO charge; while going public can be lucrative, it can also just be plain expensive in the short term.

Who could have predicted StubHub’s IPO wouldn’t be another smash hit? Our very own Ann Berry did, in fact. Before the company went public, Ann pointed out that StubHub’s valuation didn’t make sense considering how profits have fallen while marketing expenses have risen. Listen to her thoughts about StubHub on the Brew Markets podcast.—LB