EBay Sells StubHub
EBay Inc. is selling its ticket marketplace StubHub to European rival Viagogo for $4.05 billion in cash, allowing the company to focus on its main retail site and address pressure from shareholder activists.
Starboard Value and Elliott Management Corp., the New York-based hedge fund run by billionaire Paul Singer, earlier this year proposed a plan to improve EBay’s performance, including a sale of StubHub and the classifieds business. In March, the company agreed to add two directors to the board and pledged to launch a strategic review as part of the settlement with the hedge funds.
EBay’s shares rose 1.2% to $35.53 at 12:23 p.m. Monday. They’re up about 29% this year, giving the San Jose, California-based company a market value of about $29 billion. The pressure for change led to Devin Wenig’s departure as EBay chief executive officer in September. Wenig was fired after he failed to grow the marketplace platform and clashed with the board about not wanting to sell the classifieds business, people familiar with the matter said at the time.
Wenig took over EBay following its split with PayPal in 2015 and made bold promises of returning the marketplace to prominence. To compete against Amazon.com Inc., Wenig tried to freshen EBay’s image with younger shoppers, made the site easier to navigate and harnessed artificial intelligence to give EBay merchants real-time insights about what shoppers want and how much they’re willing to pay.
EBay interim CEO Scott Schenkel said in a press release that the transaction “maximizes long-term value for eBay shareholders” and concluded this was the “best path forward for both eBay and StubHub.” Schenkel replaced Devin Wenig, who stepped down as eBay’s president and CEO in September.
Eric Baker, Viagogo’s founder and CEO, said in a statement that he had long wished to combine the two rivals. He claims the merger “creates a win-win for fans.” EBay bought StubHub for $310 million in 2007. The website sells tickets for a variety of events, including sports and concerts. Viagogo is a Switzerland-based company that also resells tickets, mostly for sporting events including European football, rugby and cricket.
Viagogo has had its share of problems. During the FIFA World Cup in 2018, the governing body of the soccer tournament filed a criminal complaint against the company from consumers and watchdog groups about “opaque and deceptive business conduct.” It was also in hot water from the United Kingdom for similar “deceptive” practices.