Vivid Seats stock soars after corporate structure simplification deal

Investing.com -- Vivid Seats Inc (NASDAQ:SEAT) stock jumped 13.1% in Monday premarket trading after the ticket marketplace announced a corporate simplification agreement that will eliminate its dual-class structure and terminate its Tax Receivable Agreement.

The company will simplify its organizational structure by exchanging 403,022 shares of Class A common stock to terminate the Tax Receivable Agreement. This move eliminates $6 million in cash payments that would have been due in Q1 2026 and is expected to result in up to $180 million in lifetime savings for the company.

As part of the restructuring, Vivid Seats anticipates reducing its annual cash tax payments to approximately $3 million, with future taxes primarily coming from income generated in foreign jurisdictions. The company also expects to save around $1 million annually from reduced compliance and financial reporting costs associated with moving to a single-class stock structure.

"This agreement results in near-term cash savings while enhancing our long-term cash flow profile with substantial tax amortization offsetting domestic income for the foreseeable future," said Stan Chia, Vivid Seats’ Chief Executive Officer. "Our streamlined corporate structure will also reduce costs while simplifying financial reporting."

The transaction will involve former TRA parties exchanging all outstanding shares of Class B common stock for Class A common stock on a one-for-one basis. Following the completion of the deal, Vivid Seats will have a single class of common stock with approximately 10.7 million shares outstanding.

A special committee of independent and disinterested directors from Vivid Seats’ Board approved the agreement and related transactions.

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