Ticket Resellers Stubhub, Vivid Seats Give Dismal Earnings Reports

Ticket resellers StubHub and Vivid Seats have released disappointing earnings reports, highlighting challenges in a rapidly growing industry. Vivid Seats, based in Chicago, missed revenue and earnings targets in their third-quarter earnings release, and may face a second reverse stock split to stay listed on Nasdaq. Despite rising sales, the company remains unprofitable, with its share price down nearly 80% this year to $1.49 and market capitalization reduced to less than $17 million.

StubHub, another affected reseller, also missed analyst targets in its latest quarter, reporting $502 million in revenue and $33.6 million in net income. The company's stock has declined by more than 60% this year, falling another 4.4% in post-market trading. With a robust sports calendar including the FIFA World Cup and NFL season, both companies struggled despite the growing popularity of live sports.

The financial troubles of these resellers are attributed to factors such as competition from other ticket resale marketplaces, substantial debt, increased regulation, and internal issues. StubHub is currently under scrutiny from U.S. House Democrats for CEO Eric Baker's dual role in another ticket resale firm, Andro Capital Management, leading to suspicions of market manipulation.

Other major ticket marketplaces like Gametime and SeatGeek, mostly privately owned or venture-backed, have also considered or avoided IPOs. Live Nation, the largest player in this industry, reported significant revenue and attendance increases last week. Vivid Seats is attempting to stabilize its financial situation through a recapitalization plan, reducing debt by $200 million.

However, this will likely dilute existing shareholders. Craig-Hallum downgraded its rating on Vivid Seats shares to a hold, expressing doubt about the company's prospects due to the multitude of challenges it faces.