In this segment from the Motley Fool Money podcast, host Chris Hill and his guests, Fool senior analysts Jason Moser, Matt Argersinger and Ron Gross, reflect on the high-flying IPO of event management and ticketing website operator Eventbrite (EB -0.31%). How well can it really compete with much larger, more powerful rivals like Live Nation? The Fools consider the company's past and its future.
A full transcript follows the video.
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This video was recorded on Sept. 21 , 2018.
Chris Hill: The award for IPO of the week goes to Eventbrite. Shares of the ticketing and event technology platform rose 70% on its first day of trading. You tell me, Matty. Is Eventbrite a stock I need to put on my radar?
Matt Argersinger: Well, it's an interesting company. I'd qualify that 70%. Even though the IPO price was $23, it actually opened for trading at $36. Us public investors never had an opportunity to buy at $23. Still a very impressive debut.
The company, as far as I understand, it's really focused on the smaller creators. Anyone from small artists to fundraising, things like that, and creating events, selling tickets to those things. You have $255 million in revenue over the last 12 months. That's growing about 50% per year. Market cap right now is around $3 billion, so the valuation is high. I wonder how they compete or measure up against a company like Live Nation, which also does events, but obviously on a bigger scale, and also owns venues and has relationships with artists. I think Eventbrite is probably a company that's going to focus on the smaller events, smaller artists. Maybe that's their niche.
Hill: That's the thing. When you look at Eventbrite's business, and the venues they're working, with the acts that they're working with, in the same way that we talk about young start-up beverage companies, part of their goal is, "We just want to be bought by a much bigger beverage company," I'm wondering if part of Eventbrite's idea is, "Hopefully at some point, Live Nation is going to buy us."
Argersinger: It's possible. But I wonder if Live Nation would ever be interested in doing things at this kind of scale. But, hey, if Eventbrite proves the model out... They've obviously had some nice traction. They served 700,000 creators and events last year. There's something to the business.