Anyone who has ever bought a ticket to a concert or professional sports event on the secondary ticket market probably has strong feelings about the process and the cost.
I know I do, even as I hit purchase while swearing at the bots and scalpers that have bought all the tickets on the primary marketplace before regular people like me even have a chance.
The secondary marketplace is viewed by many as a racket and faces widespread criticism -- just look at reddit.com/stubhub and you'll see how people feel.
It's a very profitable business.
StubHub is the most well known player in this sector -- in 2024, StubHub reported more than 40 million tickets sold to over 1 million unique sellers globally, according to Industry Previews -- but there are plenty of competitors, including SeatGeek, Vivid Seats, Gametime, and TickPick.
StubHub accused of failing to disclose risks to investors
Now StubHub is facing a wave of legal challenges after its $758 million initial public offering (IPO) in September, as investors claim the company failed to disclose material financial risks ahead of going public.
The complaint, filed November 24 in federal court in Manhattan by Glancy Prongay & Murray on behalf of investor Daniel Salabaj, alleges that StubHub's registration statement misled shareholders by omitting critical information about the company's cash flow problems.
Salabaj purchased shares during StubHub's IPO, when roughly 34 million shares were sold at $23.50 each.
StubHub revenue
- 2024 annual revenue: About $1.77 billion. Source: Bloomberg
- 2024 gross merchandise sales (GMS): Approximately US$8.7 billion (total value of tickets sold through the marketplace) in 2024. Source: Industry Previews
- Q3 2025 (three‑month period ending September 30, 2025) revenue: $468.1 million. Source: StubHub
- GMS for quarter:$2.4348 billion, up 11% YoY. Source: StubHub
- Adjusted EBITDA:$67 million, representing a 14% margin. Source: StubHub
- Profit/loss (Q3 2025):Net loss of $1.294 billion, largely driven by a one‑time stock‑based compensation charge related to the IPO. Source: StubHub
"The complaint filed in this class action alleges that the Registration Statement was materially false and/or misleading, and failed to disclose material adverse facts about the Company's business, operations, and prospects," said the law firm in a press release.
At least eight other law firms, including Robbins LLP, Pomerantz LLP, and Rosen Law Firm, have announced investigations into StubHub's financial disclosures and IPO process.
StubHub's recent earnings report had some red flags
The legal action follows StubHub's first quarterly earnings report as a public company, filed November 13. The filing showed a free cash flow of negative $4.6 million for Q3 2025, compared with positive $10.6 million in the same quarter a year earlier.