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StubHub Founder's Scalper Ties Exposed

11 Jul

Summary

StubHub's CEO also manages a large ticket reseller.
The company helps finance professional resellers on its platform.
Concerns arise amid recent World Cup ticket sale issues.

StubHub's operations have come under scrutiny following revelations that its founder and CEO, Eric Baker, also manages a significant ticket reseller, Andro Capital. This entity has been a user of the StubHub platform since 2008, with StubHub providing services such as inventory management and order fulfillment. The company has also engaged in direct financial transactions with Andro.

Further complicating matters, StubHub has established agreements to provide short-term financing to sellers through Colloquy Capital, an affiliate of Andro. This financing is based on the anticipated revenue from future ticket sales on StubHub, with repayments facilitated by direct deductions from seller proceeds. This program has seen rapid expansion in recent periods.

These close ties to professional scalpers and the introduction of financing mechanisms based on expected future sales are raising significant questions about market practices. The disclosures follow a period of considerable customer dissatisfaction and legal challenges related to StubHub's handling of World Cup ticket sales, including allegations of canceled tickets and failed transfers.

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