How to Invest in SeatGeek Pre-IPO

SeatGeek is a leading mobile-focused ticketing platform. The company has partnerships with several notable sports teams (including the Dallas Cowboys), sports leagues (e.g., NFL and MLB), and a few Broadway theaters.

The ticket seller is growing fast thanks to its consumer-focused marketplace, innovative technology, and partnerships. By early 2023, more than 33 million people had downloaded its app, and its platform has more than 47 million tickets available each day.

SeatGeek is looking to cash in on the growing ticket market by going public via an initial public offering (IPO), which could come in 2024. Here's everything you need to know about SeatGeek, including how you might be able to get your hands on some pre-IPO shares.

Publicly traded?

Is SeatGeek publicly traded?

As of mid-2024, SeatGeek isn't a publicly traded company. It's still a private company owned by several notable venture capital firms, co-founders, and other investors. Notable investors in SeatGeek include former pro football stars Eli and Payton Manning.

The company attempted to go public in 2021, striking a deal with RedBall Acquisition Corp., a special purpose acquisition company (SPAC) led by Oakland A's executive Billy Bean (of Moneyball fame) and Phoenix Suns star Kevin Durant. However, that deal fell apart a year later due to volatile market conditions.

When will it IPO?

When will SeatGeek IPO?

SeatGeek is preparing to put its IPO on the calendar in mid-2024. The ticket-seller is working with investment bank Morgan Stanley (MS -1.16%) to lead its IPO. Citigroup (C 0.49%) and Wells Fargo (WFC 0.72%) were also added to its IPO team.

Bloomberg reported in June 2024 that SeatGeek could go public by the end of the year. It's seeking a valuation above the almost $1.4 billion it agreed to in 2021 when it almost went public via a SPAC deal that fell through in 2022.

How to buy

How to buy SeatGeek stock

Since SeatGeek is still a private company, you can't buy shares in a regular brokerage account yet. However, accredited investors (i.e., those with a high net worth or high annual income) can sometimes purchase pre-IPO shares of companies like SeatGeek on a secondary marketplace like Forge Global (FRGE 6.77%), Hiive, and EquityZen.

Unfortunately, non-accredited investors will have to wait for SeatGeek's IPO to buy shares. In the meantime, they could consider investing in a competing platform or another company capitalizing on the live sports and entertainment industry. Here are some alternative options to consider while you're waiting for SeatGeek's IPO:

Live Nation Entertainment

Live Nation Entertainment (LYV 0.54%) is the world's top live entertainment company. It operates three businesses: Ticketmaster (which competes against SeatGeek), Live Nation Concerts, and Live Nation Media and Sponsorship.

Live Nation makes 82% of its revenue from concerts, 13% from ticketing, and 5% from sponsorship and advertising. The company generated $22.7 billion in revenue in 2023 (up 36%) and more than $1 billion in operating income (a 46% increase).

Vivid Seats

Vivid Seats (SEAT -0.91%) accomplished what SeatGeek tried to do in 2021 by going public via a SPAC deal. The company closed its business combination with Horizon Acquisition Corporation in October 2021 in a deal valuing the ticketing company at almost $2 billion.

Vivid Seats generated $713 million in revenue in 2023 (up 19%) and was profitable ($107 million of net income, a 51% increase from the prior year). The company has expanded its market opportunity by making acquisitions, including Vegas.com and Wavedash, in 2023.

Madison Square Garden Sports

Madison Square Garden Sports (MSGS 0.21%) owns several professional sports teams (the New York Knicks and the New York Rangers), two development league teams (Westchester Knicks and Hartford Wolf Pack), and a state-of-the-art performance training center (Madison Square Garden Training Center).

Through the first nine months of 2024, Madison Square Garden Sports generated almost $800 million in revenue and almost $100 million in operating income. Investors who want to invest in one of these SeatGeek alternatives can buy shares in any brokerage account. Here's a step-by-step guide on how to invest in stocks.

Step 1: Open a brokerage account

You'll have to open and fund a brokerage account before buying shares of any company. If you still need to open one, here are some of the best-rated brokers and trading platforms. Take your time researching the brokers to find the best one for you.

Step 2: Figure out your budget

Before making your first trade, you'll need to determine a budget for how much money you want to invest. You'll then want to decide how to allocate that money. The Motley Fool's investing philosophy recommends building a diversified portfolio of 25 or more stocks you plan to hold for at least five years.

You don't need to buy all those stocks at once, though. For example, if you have $1,000 available to start investing, you might want to begin by slowly allocating that money equally across at least 10 stocks and then grow your portfolio from there.

Step 3: Do your research

It's essential to thoroughly research a company before buying its shares. You should learn about how it makes money, its competitors, its balance sheet, and other factors to make sure you have a solid grasp on whether the company can grow value for its shareholders over the long term. You should also research related companies like Live Nation and Vivid Seats and privately held rivals like StubHub.

Step 4: Place an order

Once you've opened and funded a brokerage account, set your investing budget, and researched the stock, it's time to buy shares. The process is relatively straightforward. Go to your brokerage account's order page and fill out all the relevant information, including:

• The number of shares you want to buy or the amount you want to invest to purchase fractional shares.
• The stock ticker (LYV for Live Nation Entertainment, SEAT for Vivid Seats, or MSGS for Madison Square Garden Sports).
• Whether you want to place a limit order or a market order. The Motley Fool recommends using a market order since it guarantees you'll be able to buy shares immediately at market price.

Once you complete the order page, click to submit your trade and become a shareholder in one of these entertainment stocks while you await SeetGeek's IPO. Investors would follow a similar process to buy an IPO stock like SeatGeek when it goes public. Once shares become available, fill out the order page at your brokerage account with the ticket seller's selected stock ticker and submit your trade.

Profitability

Is SeatGeek profitable?

Since SeatGeek is still a private company, it doesn't need to publicly report its financial results, so there wasn't much publicly available information about the company's finances in mid-2024.

According to a report by The Information in 2023, SeatGeek expected to generate more than $500 million in revenue that year. That was significantly more than it made in 2021 ($186.3 million), the last time it publicly reported financial information due to its SPAC deal with RedBall.

We do know that the company wasn't profitable in 2021. It reported a net loss of $80 million. While that was an improvement from 2020, when it lost $96.9 million due to the COVID-19 pandemic's impact on the ticketing industry, it was still much higher than it posted in 2019 ($45 million).

Given the company's revenue growth since then, it might be profitable or on track to start making money. Investors interested in buying shares at SeatGeek's IPO should check out its prospectus when it comes out to see whether the company is profitable or at least posting smaller losses.

Should I invest?

Should I invest in SeatGeek?

Because SeatGeek isn't public yet, you have plenty of time to decide whether to invest in the company. Here are some reasons you might want to buy shares of the ticker seller when it goes public:

• You're a big fan of the company and routinely use its services to buy tickets.
• You think that demand for live entertainment will continue rising, which should enable SeatGeek to grow its sales briskly.
• You believe the company will deliver strong profit growth in the future.
• You want to invest in founder-led companies.
• You understand the risks of investing in an IPO stock, including that they can be very volatile and lose money.

On the other hand, here are some reasons SeatGeek might not be the right choice for you:

• You prefer to get your tickets through a rival seller.
• You're concerned about growing competition in the ticketing market.
• You're unsure whether SeatGeek can grow its profits at a healthy rate in the future.
• You're worried about the impact a recession could have on the company's financial performance.

ETF options

ETFs with exposure to SeatGeek

You can't currently use exchange-traded funds (ETFs) to gain passive exposure to SeatGeek. However, you can use them to invest in the same trends driving its growth. Here are a couple of ETFs focused on the entertainment sector and consumer spending that you could consider while awaiting its IPO:

• Invesco Leisure and Entertainment ETF (PEJ 0.11%): This ETF focuses on companies in the leisure and entertainment industry. In mid-2024, it held 30 stocks, including Madison Square Garden Sports (2.7% of its holdings). The fund had a 0.58% ETF expense ratio.
• Consumer Discretionary Select Sector SPDR Fund (XLY 0.61%): This fund focuses on consumer discretionary stocks in the S&P 500 index. In mid-2024, it had 52 holdings, 23% of which were in the hotels, restaurants, and leisure sectors. The ETF has a 0.09% expense ratio.

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The bottom line on SeatGeek

SeatGeek has grown into one of the most popular ticket sellers. That's driving strong revenue growth, which the company seeks to cash in on via an IPO. SeatGeek could become a winning investment if sales keep surging and profitability follows.

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