- Having been severely hit by COVID-19, Eventbrite should expect very little to no growth in 2020, even after the recent shift to online events.
- The $225 million financing from Francisco Partners will allow Eventbrite to test the monetization strength of its online event program.
- However, we remain skeptical of the overall Eventbrite's long-term growth prospect.
Towards the end of last year, we discussed how Eventbrite (EB) would need to have a more attractive risk/reward profile for investment consideration. As the COVID-19 pandemic has significantly weakened the company's fundamentals and also threatened its long-term prospects, we found it hard to justify a bullish position on the stock. Upon the pandemic, Eventbrite laid off ~45% of its employees to save $100 million for the year. As it entered a distressed situation, it also received a $225 million funding from a PE firm, Francisco Partners. The shares are currently down ~40% from December when we published our first coverage on the stock. In our view, Eventbrite will be in a distressed situation for some time, even beyond 2020. Given the tough outlook, we think the price needs to drop a lot more to justify the risk/reward. We will maintain our neutral stance, leaning more towards underweight.
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