Why StubHub Recovered Double-Digits This Week
Key Points
StubHub settled its FTC lawsuit with a $10 million fine to reimburse customers.
The government alleged StubHub slow-walked its compliance with the "all-in" pricing rule, which went into effect last May.
StubHub is still down 71% from its September IPO.
Shares of event ticket reseller StubHub (NYSE: STUB) rallied as much as 15.3% this week, before falling back to a 10% gain as of 2:12 p.m. EDT Thursday, according to data from S&P Global Market Intelligence.
Last week, the Federal Trade Commission (FTC) announced a lawsuit against StubHub for allegedly violating the "all-in" pricing rule in its first few days after it was implemented in May 2025. That sent StubHub shares down, even off already low levels.
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However, the company announced a settlement of the suit this week, with a very mild penalty and no admission of wrongdoing.
$10 million settles the score
On Monday, StubHub announced it would settle the FTC lawsuit, agreeing to pay $10 million to reimburse customers, while also not admitting any wrongdoing. The $10 million is not consequential to StubHub, which had over $1.2 billion in cash on its balance sheet as of the end of the fourth quarter.
The FTC had sued StubHub last week, alleging that StubHub had slow-rolled compliance with the "all-in" rule, which required ticketing companies to advertise the total price of tickets, including taxes and fees, at all points in the selling process.
While the rule went into effect on May 12, 2025, the FTC alleged that StubHub rolled out the all-in pricing in phases to retain the prior ticket-only advertised price for the NFL season on-sale debut on May 14.
While StubHub's stock fell on the news last week, it didn't crash, given that the alleged violation occurred over only a few days. This week's mere $10 million settlement verified that thinking, sending shares upwards.
Additionally, renewed talks of a ceasefire between the U.S. and Iran, as well as Israel and Lebanon, sent oil prices falling off their highs, which has helped many consumer discretionary stocks regain some of their war-related declines this week.
Image source: Getty Images.
StubHub is still far off its highs and at a reasonable valuation
Even before last week's tumble, shares had already plunged from the stock's $23.50 IPO price in September into the $6 range, where it remains today.
StubHub's revenue declined last year, but that was mainly due to two factors: lapping the 2024 Taylor Swift Eras tour, as well as the introduction of all-in pricing, which prompted StubHub to cut its fees.
This year, management plans to grow gross merchandise volume (GMV) by close to 10% and projects a near-doubling of adjusted EBITDA. If management were to execute on those plans, the stock looks fairly cheap at today's levels.
That being said, StubHub is new to the public markets and already has a deficit of trust among investors. It may take some time for the company to regain that trust, and thus realize a turnaround.
Billy Duberstein and/or his clients have no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.