StubHub's stock crashed 24% Friday after the newly public ticket reseller shocked investors by withholding fourth-quarter guidance, citing unpredictable timing shifts in major concert tours. The guidance withdrawal overshadowed what were otherwise strong third-quarter results, sparking immediate concern about the company's near-term visibility just months after its September IPO.
StubHub just delivered a masterclass in how to tank your stock price - even when you beat earnings expectations. The ticket reseller's shares cratered 24% Friday after executives made the bewildering decision to withhold fourth-quarter guidance during their first earnings call as a public company.
The timing couldn't be worse. StubHub only went public in September, and investors were looking for reassurance about the company's ability to navigate the notoriously seasonal live events market. Instead, they got uncertainty wrapped in corporate speak about taking a "long-term approach."
CEO Eric Baker tried to explain the guidance blackout during Thursday's conference call, telling investors that ticket sale timing can shift unpredictably from quarter to quarter. "Several large tours that would typically go on sale in the fourth quarter occurred earlier in late September," CFO Connie James added, according to CNBC's reporting. "It remains to be seen how this concert on-sale timing dynamic plays out in November and December."
The explanation didn't satisfy Wall Street. Wedbush analysts said they were "surprised" by the decision and warned that "the lack of forward guidance will pressure shares, with investor concern building around lack of visibility over the near-term." They maintain an outperform rating, but that's cold comfort for shareholders watching their investment evaporate.
What makes this particularly frustrating is that StubHub actually delivered solid third-quarter results. Revenue climbed 8% year-over-year to $468.1 million, beating the average analyst estimate of $452 million according to LSEG data. Gross merchandise sales - the total dollar value paid by ticket buyers - jumped 11% to $2.43 billion, surpassing Wall Street's $2.36 billion expectation from FactSet.
The company also posted a staggering $1.33 billion net loss, but investors weren't panicking about that. The loss translates to $4.27 per share and stems entirely from one-time stock-based compensation charges tied to the September IPO - standard accounting that everyone expected.