StubHub’s IPO Miss

Note to private tech CEOs: The IPO market may look like it’s rocking but looks can be deceiving. If your company isn’t growing fast, and/or has a lot of debt, and doesn’t have either a crypto or AI angle, don’t expect a crush of demand. Check out StubHub, which fails on all the counts I just mentioned. Its stock tanked on its opening day as a public company, finishing down 6.4% from its IPO price, giving it a market capitalization of $8.4 billion. (And the stock was even lower in after-hours trading!) That’s what you call a broken IPO.

This outcome was entirely predictable. In fact, in April last year, when The Information’s Cory Weinberg scooped StubHub’s ambitions to go public at a valuation of around $16.5 billion, we wrote that $8 billion would be a more reasonable number based on comparable valuations. At the time we reported StubHub might call off its IPO if it couldn’t get close to the $16.5 billion number, which was the valuation at which it raised money in 2021, during the halcyon days. That was a fanciful notion even then, and unsurprisingly the company delayed the IPO last year and again this spring. Evidently, StubHub decided it couldn’t wait any longer. Even tech founders can’t escape reality (although a few certainly try).