Shares of eBay, Inc. (NASDAQ: EBAY) opened sharply higher on Monday after the market reacted positively to reports of the online marketplace agreeing to sell its ticketing business StubHub to Switzerland-based e-commerce firm Viagogo for about $4 billion.
On completion of the all-cash deal, which is tentatively scheduled for the first quarter of 2020, StubHub will be integrated into Viagogo, creating a mammoth entity with a market spanning across 70 countries. It would be the biggest digital platform selling tickets for sports and entertainment events globally. The market seems to have taken a cue from a statement issued by eBay’s interim CEO Scott Schenkel, saying that the transaction would bring significant value to the company’s shareholders in the long term.
“Over the past several months, eBay ‘s leadership team and Board of Directors have been engaged in a thorough review of our current strategies and portfolio, and we concluded that this was the best path forward for both eBay and StubHub. We firmly believe in the StubHub business and we are excited about its future growth potential with viagogo as its owner,” said Schenkel.
StubHub, a digital platform that sells tickets for various programs including sporting events and music concerts, joined the eBay-fold more than a decade ago pursuant to a $310-million buyout. Viagogo resells tickets, mainly for sporting events including rugby and European football.
The sale followed a series of negotiations held after eBay executives came under pressure from activist investors who suggested that divesting StubHub would help in streamlining the core business effectively. The company recently embarked on a restructuring program, aimed at organizing the various units.
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eBay shares had a positive start to the year, and gained 20% so far, though they lost some momentum in the past few weeks. The stock traded up 2% during the early hours of Monday after opening the session higher.
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