Stanley Druckenmiller bets big on StubHub amid UK regulatory pressure
Billionaire investor Stanley Druckenmiller has taken a major stake in StubHub, buying 4.26 million shares in the third quarter. The ticket resale platform is currently valued at $4 billion, but it also faces regulatory scrutiny in the UK over its pricing practices.
The Competition and Markets Authority (CMA) launched an investigation in November 2023 to assess whether StubHub’s business model violates competition rules. No findings have been released yet, but the probe adds uncertainty to the company’s future in Britain.
Druckenmiller, known for his bold investment moves, has a history of high returns. His hedge fund once delivered average annual gains of over 30%. In the latest quarter, his biggest purchases included Insmed, the iShares MSCI Emerging Markets ETF, and Amazon. He also sold off stakes in Philip Morris, Entegris, and Coherent.
StubHub’s financial performance has been strong. Gross merchandise sales and revenue are rising, with EBITDA up 21% and margins expanding to 14%. The company trades at 15 times its run-rate EBITDA, reflecting investor confidence. Yet, competition is growing from rivals like Ticketmaster and SeatGeek.
The UK government’s plan to ban ticket resales above face value could further pressure StubHub’s operations. The CMA’s ongoing investigation may also limit its growth in one of its key markets. No penalties have been imposed so far, but the outcome remains uncertain.
Druckenmiller’s investment signals confidence in StubHub’s long-term prospects. However, the company must navigate regulatory challenges and intensifying competition. The CMA’s decision and potential UK legislation will shape its future in the ticket resale market.
