StubHub Investors Sue, Claiming ‘False & Misleading’ Statements Ahead Of IPO

StubHub is facing the first of what may prove to many investor class actions lawsuits after raising $758 million in its initial public offering in September.

The suit, filed in federal district court in Manhattan Nov. 24 by the firm of Glancy Progray & Murray, comes after StubHub’s first quarterly earnings report as a public company. That Nov. 13 filing showed negative cash flow of $4.6 million and operating income off 69% from the same quarter in 2024. The company placed the blame on “changes in the timing of cash receipts and payments associated with ticket sales as well as timing of payments to vendors.”

The suit, filed on behalf of class plaintiff Daniel Salabaj, claims that StubHub’s IPO registration statement  “failed to disclose material adverse facts about the Company’s business, operations, and prospects.”

“Specifically, [StubHub] failed to disclose to investors that: (1) the Company was experiencing changes in the timing of payments to vendors; (2) those changes had a significant adverse impact on free cash flow, including trailing 12 months free cash flow; (3) as a result, the Company’s free cash flow reports were materially misleading; and (4) that, as a result of the foregoing, [StubHub’s] positive statements about the Company’s business, operations, and prospects, were materially misleading and/or lacked a reasonable basis,” the firm wrote in a press release.

StubHub’s price fell precipitously after the Nov. 13 release of its earnings, dropping nearly 21% to $14.87 a share on Nov. 14. It eventually bottomed out near $10 on Nov. 20. It has rebounded since: it was at $12.70 midday Wednesday, but that’s almost half its IPO price of $23.50.

In addition to the company itself, defendants include CEO Eric Baker and the basket of underwriting banks.

At least eight other law firms are investigating investor class actions of their own.