On November 14, California-based StepStone Group disclosed a new position in StubHub (STUB +4.09%), acquiring nearly 7.6 million shares valued at an estimated $127.3 million.
What Happened
StepStone Group disclosed a new stake in StubHub, purchasing nearly 7.6 million shares during the third quarter, as detailed in its SEC filing dated November 14. The position, valued at $127.3 million as of September 30, represents a substantial addition to the fund’s U.S. equity holdings.
What Else to Know
This new position in StubHub accounts for 59.9% of StepStone Group LP’s reportable U.S. equity assets as of quarter-end.
Top five holdings after the filing:
- NYSE:STUB: $127.3 million (62.7% of AUM)
- NYSE:KRMN: $21.1 million (10.4% of AUM)
- NYSE:PATH: $17.2 million (8.5% of AUM)
- NASDAQ:GENVR: $11.2 million (5.5% of AUM)
- NASDAQ:DKNG: $6 million (3% of AUM)
As of Friday, shares of StubHub were priced at $13.95, down 40% from their September IPO price of $23.50 per share.
Company Overview
| Metric | Value |
|---|---|
| Price (as of market close Friday) | $13.95 |
| Market Capitalization | $5.1 billion |
| Revenue (TTM) | $1.8 billion |
| Net Income (TTM) | ($1.3 billion) |
Company Snapshot
- StubHub operates a global digital marketplace for secondary ticket sales, facilitating transactions for sports, concerts, theater, and live events across more than 200 countries.
- The company generates revenue primarily through transaction fees charged to buyers and sellers for each ticket sold on its platform.
- Its primary customers include individual ticket buyers, event-goers, and ticket resellers seeking access to live entertainment events worldwide.
StubHub is a leading technology platform in the secondary ticketing industry, leveraging its scale and digital infrastructure to connect millions of buyers and sellers. The company’s strategy centers on providing a secure and efficient marketplace for live event tickets, supporting a diverse range of event categories. StubHub’s competitive advantage lies in its broad international reach and established brand, positioning it as a key player in the global event ticket resale market.
Foolish Take
StepStone’s move reflects conviction in StubHub’s business durability despite its short-term stock performance. Secondary ticketing is cyclical and sentiment-driven, but demand for live events has proven far more resilient than most consumer categories, even as discretionary spending tightens.
StubHub’s latest quarter reinforces that point. Gross merchandise sales reached $2.4 billion, up 11% year over year, or 24% excluding the Taylor Swift tour, while revenue rose 8% to $468 million. Adjusted EBITDA also climbed, up 21% to $67 million, with margins expanding to 14%, signaling improving operating leverage even amid public-company transition costs. The headline GAAP loss was driven almost entirely by a one-time $1.4 billion stock-based compensation charge tied to the IPO, not underlying business deterioration.
Equally important for long-term holders, StubHub used IPO proceeds to reduce debt by roughly $750 million, bringing net leverage down to 3.9 times trailing adjusted EBITDA and materially strengthening its balance sheet. Compared with the rest of the portfolio, this position stands out as a high-conviction bet on cash flow normalization rather than near-term multiple expansion.
Glossary
13F reportable assets: U.S. securities that institutional investment managers must disclose quarterly to the Securities and Exchange Commission (SEC) in Form 13F.
Assets under management (AUM): The total market value of investments managed on behalf of clients by a fund or firm.
Portfolio weight: The percentage of a portfolio's total value allocated to a specific holding or asset.
Alpha: A measure of an investment’s performance relative to a benchmark, indicating value added or subtracted by active management.
Trailing twelve months (TTM): The 12-month period ending with the most recent quarterly report.
Forward price-to-earnings ratio: A valuation metric comparing a company’s current share price to its expected future earnings per share.
Enterprise value to EBITDA: A valuation ratio comparing a company’s total value to its earnings before interest, taxes, depreciation, and amortization.
Secondary ticket sales: The resale of event tickets after their original purchase, typically through online marketplaces.
Transaction fees: Charges collected by a platform or intermediary for facilitating the purchase or sale of goods or services.
Market capitalization: The total value of a company’s outstanding shares, calculated as share price times number of shares.
Digital marketplace: An online platform where buyers and sellers conduct transactions for goods or services.
