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GameStop makes $55.5B takeover offer for eBay

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Re: GameStop makes $55.5B takeover offer for eBay

#81

Post by i_think_so »

manwithnoplan wrote: post #25

A lot of the comments here seem to assume that a smaller public company can’t acquire a larger one, which just isn’t true. A quick search for how leveraged acquisitions, stock-for-stock deals, financing commitments, or tender offers work would answer most of the objections. Is it too much to ask the Hacker News commentariat to do one quick search before collectively declaring that something they don’t understand is i…

Speaking as someone who used to know absolutely nothing about the world of high finance, yes, it is too much to ask.

Before I started paying attention to such things I wouldn't have known a single one of those terms to even begin googling.

And let's be honest here. A smaller company saddled with big debt buying out an even larger company really doesn't make logical sense. It makes financial sense, which is subject to different laws of mathematics, probably involving the waiter's check pad in an Italian bistro.

Re: GameStop makes $55.5B takeover offer for eBay

#82

Post by alchemist1e9 »

cyanydeez wrote: post #62
mapt wrote: post #56

Earlier quoted context omitted.

While this seems like the perfect synergy with a company that has too many branches and not enough business, those branches are also tiny. I'd bet employees are not enthusiastic about becoming UPS. Becoming Radio Shack / Microcenter, as far as 3D Printing and DIY electronics, seems like it intersects with their target audience more, but they're also probably pretty short on space for that.

yeah, their shops arnt sized to do much more than UPS style package movement. I dont see it as a good value, but it's the only thing I see as a synergy. Otherwise it's just more garbage capitalism.

> garbage capitalism.

How is this defined?

Re: GameStop makes $55.5B takeover offer for eBay

#83

Post by fontain »

pjc50 wrote: post #2

Important background: https://investor.gamestop.com/news-releases/news-details/202... CEO gets paid "only if GameStop achieves a market capitalization of $20 billion." Buying a $55bn company would certainly achieve that quickly. I'm not sure how they'd manage that (buy with what? Memes?), other than the should-be-illegal process of putting debt on the acquired company's balance sheet.

Cohen is already rich rich, his GameStop compensation doesn’t really matter much. The eBay acquisition could be a strategy to juice his compensation but I think it is much more likely he does believe that he can achieve his stated aims, which will financially benefit him much more in the long term.

Re: GameStop makes $55.5B takeover offer for eBay

#85

Post by surgical_fire »

Lionga wrote: post #19
orlp wrote: post #13

Earlier quoted context omitted.

Yes, that goes into the '50% cash' part of the offer. With a 20B credit line and 7.5B cash from their own coffers (which they claim to have, so let's believe them on their word there), you cover the cash portion. The issue is the non-cash portion of the offer. They claim that the remaining 27.5B is covered by GameStop stock. But that's more than double the market cap of GameStop.

You understand that the gamestop stock would then be owning ebay, thus be worth Ebay + Gamestops Valuation?

They would also be owning a company that now would have +20B in debt.

They now own ebay. They would include in that math 20B in debt plus Gamestop.

This sounds like a pretty bad deal for ebay investors.

Re: GameStop makes $55.5B takeover offer for eBay

#86

Post by darkwater »

wwalexander wrote: post #54
manwithnoplan wrote: post #36

Earlier quoted context omitted.

It is implicitly implied in many comments.

“Implicitly implied” is redundant. Either of these phrasings would suffice: > It is implicit in many comments. > It is implied in many comments.

Well, it's called "tautology" and it's a perfectly valid rhetorical device.

Re: GameStop makes $55.5B takeover offer for eBay

#88

Post by 59percentmore »

OtherShrezzing wrote: post #50
lesuorac wrote: post #9

Earlier quoted context omitted.

Well, his argument is that he can remove inefficiencies in the combined company. GME is ~12B, EBAY is ~46B (58 total) with net income of 0.4B and 2B (2.4 total). If he boosts profit by 1.2B then it's nearly a 50% increase and probably going to result in a more valuable combined company despite the debt.

>GME is ~12B, EBAY is ~46B (58 total) with net income of 0.4B and 2B (2.4 total). If he boosts profit by 1.2B then it's nearly a 50% increase and probably going to result in a more valuable combined company despite the debt. GameStop had revenues of $3bn last year and eBay was $10-12bn, so combined it's $13-15bn. A net income increase of 1.2bn on that gross is a tall order for M&A efficiencies. Especially difficult w…

I don't think this is a serious assessment. For years, the core business of both companies has been facilitating the flow of used goods. Gamestop has moved strongly into collectibles recently, with a partnership with collectible grading firm PSA and the introduction of (essentially) lucrative trading card lootboxes, whereas eBay has capitalized on the same expansion of the collectibles market with new live/flash auction features.

IIRC, Gamestop recently had a "trade-in anything" day, where they accepted a variety of products for store credit. Seems an awful lot like this was some sort of test for accepting products in-store for eBay listings, or something along those lines. They already accept trading cards to send off to PSA for grading and to place into their lootbox system.

As far as efficiencies go, you can see things like shifting shipping by individual sellers to mass shipping to/from a warehouse, a much heavier footprint in collectibles, and perhaps quality control that reduces buyer disputes (this one's a bit iffy).

Re: GameStop makes $55.5B takeover offer for eBay

#90

Post by yk »

bilekas wrote: post #63
gizajob wrote: post #48

Earlier quoted context omitted.

I don’t understand why eBay shareholders will suddenly want GME memestock and find any interest in voting for this.

I don’t understand either but wouldn’t they still be owning eBay? Just with GME?

They own eBay + GME + some financial alchemy. If you aren't a financial wizard you should assume that the value of the financial alchemy is negative. (Because 99% of the time it is.) Now, what are the synergies of eBay + GME that outweighs the chaos caused by the merger and the finance stuff?
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