News broke this evening that eBay have completed the StubHub sale to viagogo for $4.05 billion in cash (about 4 times StubHub’s ~$1.2bn annual revenue) and are supposedly out of the ticket business. What will be interesting to watch is how this impacts the tickets category on eBay. Whilst eBay might have flogged off StubHub, they still have a tickets category and sellers are free to list them should they wish to so are effectively now StubHub’s competition.
If you are a ticket seller, don’t expect StubHub and viagogo to be integrated tomorrow – in the UK at least the CMA have a planned inquiry into the merger and the companies will be operated separately in the near term at least.
“The completed sale of StubHub to viagogo is a great outcome both in terms of the $4.05 billion sale price and the potential StubHub has with its new owner. The StubHub transaction reinforces our commitment to creating shareholder value and is consistent with other steps we have taken such as margin improvement, share buybacks and issuing dividends. We are operating with discipline and focus, improving financial performance and delivering improved customer experiences. On behalf of the eBay team, we’re excited to see how StubHub evolves in its next phase and benefits fans, partners and employees.”
– Scott Schenkel, interim CEO of eBay Inc
Sukhinder Singh Cassidy, SVP & President of StubHub, has already been erased from eBay’s ‘Our Leaders’ page.
So what will eBay do with the big wedge of cash to appease activist shareholders? Well they’ve already announced that they’ll get about $3.1 billion in net proceeds and they’ll bung $3 billion of that into share buybacks. Having planned share buybacks of $1.5 billion they’ve upped the plan to $4.5 billion.
The impact of the share buyback will be to increase earnings for the remaining shares in the company. Net revenue for Q1 is now forecast to be between $2.31 billion and $2.36 billion, reflecting the impact of removing StubHub so down from the previous forecast of $2.55 billion and $2.60 billion.
GAAP earnings per diluted share for Q1 are now forecast by eBay to be in the range of $0.54 – $0.57 (up from $0.50 – $0.53) and non-GAAP earnings per diluted share from continuing operations in the range of $0.72 – $0.75 (up from $0.70 – $0.73).
Undoubtedly activist investors won’t be happy with the completion of the StubHub sale to viagogo, it will in their eyes be a step in the right direction but what they now want is to see the sale of eBay Classifieds. Having seen eBay vulnerable leading to the sell off of PayPal and now StubHub, Classifieds is the next easy pickings already under consideration and sadly if that happens investors will be looking for the next way to extract a wedge of shareholder value from eBay… But in reality there’s not a lot left to sell other than the marketplace itself, which will be a bit more of a bite sized chunk to acquire now it’s been asset stripped to the bone.
I would say – organsied crime expanding…
So they’ve sold something that brings LONG term profit for SHORT term gain … another stupidity…
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