Eventbrite (NYSE:EB) had a rough rookie season after going public in the latter half of 2018, but the sophomore slump has been worse. The online event ticketing specialist announced on Wednesday that it's cutting loose 45% of its global workforce, a painful move that along with other cost-saving initiatives should trim $100 million in annual expenses. 

A lot of companies are going through hard times right now, but it's easy to see why Eventbrite is reeling. Eventbrite helps organizers of small and sometimes large events through its online platform for ticketing and registration. Given the social distancing constraints that have been in place since last month, premium event listings have dried up. It's down to promoting online events, and most of those are free listings. 

A crowd gathers at a concert.

Image source: Getty Images.

From bad to worse

It's been nearly 19 months since Eventbrite went public at $23. It was a rock star at first, closing just above $36 on its first day of trading. Eventbrite had a lot of the traits one likes to see in a growth stock out of the gate.

It had a model that made sense, arming event promotors with online ticketing tools and the ability to reach the world. Eventbrite also came riding high on heady growth. Revenue had soared 51% in 2017, decelerating only slightly for a 45% top-line advance by the time 2018 was in the books. A lot has changed since then. Growth has decelerated sharply, with revenue climbing just 9% higher in its latest quarter.

Performances, seminars, and conferences have shifted online now, and with no limitations on crowd size in cyberspace, many promoters are simply leaning on social media tools to get the word out. Eventbrite helped complete 309 million ticket requests for 4.7 million events last year, but it's a different world now. Eventbrite pulled its earlier guidance last month, and the next couple of quarterly reports will be brutal. 

Eventbrite stock closed out its first year of trading 20% below its IPO price. We're now a little more than six months into its second year on the market and the shares have shed more than half of their value. Wednesday's close was a whopping 68% below its debutante price of $23. 

It goes without saying that investing in IPOs will always be risky. Eventbrite is naturally a victim of the COVID-19 crisis, but its woes won't end when the pandemic passes. Organizers will be more proficient in hosting online events and mastering the social media tools for promotion. The inevitable recession will cool interest in the premium events that result in Eventbrite taking a piece of that action. It's going to be a different world for Eventbrite when this is all done, and that's not a good thing.