StubHub got slapped with a class action lawsuit after investor Daniel Salabaj accused the company of hiding cash flow problems before its IPO. The ticketing platform raised around $758 million when it went public but allegedly left out key details about operational changes that tanked its financial position.
The complaint says StubHub failed to warn shareholders about timing issues with vendor payments that would mess up cash flow numbers. Free cash flow went negative by about $4.6 million compared to the positive $10.6 million the year before. At least eight law firms jumped in to investigate after the stock crashed nearly 21 percent following the quarterly earnings drop. Shares bottomed out at $10.31 before bouncing back slightly but still sit way below the $23.50 IPO price.
The complaint says StubHub failed to warn shareholders about timing issues with vendor payments that would mess up cash flow numbers. Free cash flow went negative by about $4.6 million compared to the positive $10.6 million the year before. At least eight law firms jumped in to investigate after the stock crashed nearly 21 percent following the quarterly earnings drop. Shares bottomed out at $10.31 before bouncing back slightly but still sit way below the $23.50 IPO price.
