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Hawk’s Nest

Small-Cap Play on Live Events, Experiences Draws Insider Buys

by | Apr 3, 2022

Vivid Seats (SEAT) hitting some bullish technical scans to kick off the week and follows insider buying on 3/14 when a director added $300K in stock at $10.57, an intriguing setup overall that warrants a closer look. SEAT is a $2.18B operator of an independent secondary marketplace for tickets including live sports, concerts, and theater events. The company went public via SPAC deal and began trading in October 2021 while Draft Kings announced an investment in the company later in the Fall. The sports betting firm sees opportunity for synergies between the two as complementary businesses and loyalty programs, marketing, and promotional collaborations. SEAT is a growing, profitable business in the $39B ticketing market that is well-positioned for growth in the post-pandemic recovery. They see the supply/demand dynamics for the market creating a favorable backdrop as well with artists and teams looking to return to normalcy while consumers are craving live experiences. Shares trade 50X earnings, 4.93X sales, and 4.45X cash. CSFB started coverage on 1/31 at Outperform noting that during 2021, Vivid Seats launched its new web v2.0 and mobile v3.0 experiences, as well as its updated loyalty program, which collectively should drive higher repeat order rates and output to higher customer LTV and higher long-term adjusted EBITDA margins. The analyst also sees potential for faster-than-expected new user growth, and optionality for additional revenue streams to emerge from Betcha Sports.