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Here's Why Eventbrite Shares Are Tumbling Today

By Chris Neiger - May 13, 2020 at 3:07PM

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Investors were spooked by the uncertainty surrounding the economy.

What happened

Shares of Eventbrite (EB 3.67%), an event-management and ticket company, fell today as news of a slowing U.S. economy spurred investors to sell the stock. As of 2:45 p.m. EDT, the company's share price was down 12.4%.

So what

Investors were already growing pessimistic about Eventbrite's stock after the company released its first-quarter financial results on Monday. Net revenue decreased 39% to $49.1 million, as in-person events across the country were canceled due to COVID-19. Eventbrite said that the "pandemic-related impact" cost the company $19.1 million in revenue during the quarter.

Additionally, the company's loss per share of $1.71 was far worse than analysts' consensus estimate loss of $0.24 per share.

A stock market chart with red and green line graphs.

Image source: Getty Images.

But investors continued to drive Eventbrite's stock down today, likely because Federal Reserve Chairman Jerome Powell said that the U.S. economy will probably need more stimulus and that the outlook for the economy is "highly uncertain and subject to significant downside risks."

That news scared investors across nearly every sector and sent the S&P 500 down about 2% by midday.

Now what 

Investors who were already concerned about Eventbrite's ticket and event-management business during the pandemic clearly didn't feel comforted by Powell's comments today. As investors continue to process economic news related to COVID-19, Eventbrite's stock will likely remain volatile.

Chris Neiger has no position in any of the stocks mentioned. The Motley Fool recommends Eventbrite, Inc. The Motley Fool has a disclosure policy.

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