About a year ago, I wrote about StubHub’s S-1.
I spent days reading through it, analyzing it.
I came away skeptical…if I’m being nice.
Yesterday, the market caught up to me.
StubHub’s stock fell 12.8%. Q4 revenue fell 16% to $449 million. Full year loss? $1.9 billion.
I told you so.
Let me recount the ways.
What I Saw
“I feel like the S-1 told me nothing about StubHub’s business. I look for competitive advantages, power dynamics, and actions that deliver on the opportunity. I didn’t see that. I saw a sales document built on a mountain of modern business buzzwords and BS like Artificial Intelligence, Machine Learning, gambling, and data.”
That was my opening last year.
I called the S-1 a Hail Mary.
I called my shots.
The Marketing Spend Problem: In 2024, StubHub spent $828 million on sales and marketing, leaving a $138 million profit.
“Slow the marketing spend and watch the market share rapidly recede.”
The GMS Distraction: You don’t remember GMS?
“What is GMS? The combined total of the customer’s price, including fees, the fees sellers are charged, and ‘the net proceeds we remit to sellers.’ Yes. That last bit is confusing.”
The Vivid Seats Comparison: StubHub valued itself at 26 times Vivid Seats. In 2025, $2 billion would have been able to get you Vivid Seats and SeatGeek.
The Brand Question: 84% aided awareness. Unaided awareness is the gold standard.
The Flywheel: Flywheels work due to network effects. On the secondary market, that usually means paid advertising.
StubHub’s Earnings Revealed:
Q4 Revenue of $449M, down 16% YoY. That means the core business is shrinking.
Marketing spend was up 7% while revenue fell. Acquisition costs are rising, ROI is falling.
$1.9 billion loss for the full year. Huge losses.
GMS up 6% to $9.2 billion. Tells you nothing. Hides everything.
The market saw through all of this. The stock fell 12.8% in one day. $510 million in market value…gone.
Despite my love of being right, this isn’t about me.
This is a case study in strategic drift.
StubHub chased GMS, a mirage.
The mission of “democratizing” tickets and “creating transparency” in the ticket market may sound lofty, but they are corporate buzzwords.
They were chasing the Money Mirage. The mistake that revenue equals strength.
They spent $828 million on marketing in 2024. In 2025, $972 million.
17.4% more.
Total revenue. Down 1.4%.
That’s not a strategy. That’s a treadmill.
They’ve built a brand that claimed 84% aided awareness.
But what are the brand associations?
Changing sellers’ terms. Delayed payments. Fees. Frustration.
That celebrated flywheel.
Runs on ad spend. When you spend more and get less, the flywheel slows. Then stops.
What Happens Now
StubHub’s 2026 guidance projects $9.9B-$10.1B GMS and $400M-$420M adjusted EBITDA.
They are betting on:
- North American market growth
- International expansion
- Improved marketing efficiency
- Consistent take rates
At the same time:
- California and New York consider price caps
- UK argues about a for-profit resale ban
- StubHub spent $144 million more on marketing and sales in 2025, but made less money
- Vivid Seats is offering incentives to steal buyers and sellers
This is the same language from the S-1. But when your core business is shrinking, spending smarter and “trust me” aren’t the answer.
Knowing what you are really building is.
GMS. Aided awareness. International expansion.
All sound good on earnings calls.
They might even sound like a strategy.
Everything about the earnings tells me that StubHub has built a business that customers only choose because they have to.
Not because they want to.
The stock crash and earnings call might tell a story.
But neither is the main story.
That’s strategic drift.
What Do You Think?
Hit reply and let me know.
Dave
P.S. If you found this useful, forward it to someone who needs to understand the difference between metrics and strategy.