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2021: a Reddit short squeeze kept GameStop from going under. 2026: GameStop is bidding $55B for eBay, a company 4x its size. If it lands, this might be the strangest full circle moment public markets have ever produced.
Is it still riding the meme stock wave or has GameStop made a turnaround?
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.
Wouldn’t that debt knock down the market cap as much as the value Otherwise take out a $20b loan and put it in the bank. Assets increase $20b, job done.
Its good for GameStock management who will end up running a much bigger business. https://investor.gamestop.com/news-releases/news-details/202...
Game Stock management is essentially claiming that they can run Ebay better than the current management so Ebay shareholders will end up better off by selling to Game Stock: they get some cash and shares in a business that will be mostly a better run Ebay. Very possible bad for GameStock shareholders who will end up with a smaller stake in a bigger business.
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.
Update: Numbers still don’t add to $55b - I think there’s a $14b shortfall. Not sure about how they are planning to fund that.
Is this offer on a timer?
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.
I’m disappointed and surprised you left out half of the conditions that grant him this compensation and only included one that suggests that all he has to do is buy a bigger company with GME stock: “ The award is divided into nine tranches that are eligible to vest only if the Company achieves both a “Market Capitalization Hurdle” and a corresponding “Cumulative Performance EBITDA Hurdle”.” This changes basically eve…
Earlier quoted context omitted.
So you mean...marrying someone but transfer all the personal debt to the others, then divorcing so that I have no responsibility whatsoever? Not even an obligation to settle for the debt just like disappeared through an expired relationship?
Is there a legal term for this kind of restructuring of debt?
To me it seems more like leveraged buyouts + debt restructuring all at once. I rather coin this term "debt offloading", which could also cover the cases with Enron for the tactics they used about 25 years ago
Are there still large shorts on GameStop? If this goes through I assume it will wipe those out?
Earlier quoted context omitted.
It's newly issued stock, a common form of making acquisitions cheaper
How is a 20bn company going to issue 27bn worth of stock? Or are they just going to pretend the newly issued shares are valued the same per share as existing stock is right now?
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