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GameStop makes $55.5B takeover offer for eBay

bbc.co.uk

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Re: GameStop makes $55.5B takeover offer for eBay

#221

Post by bhouston »

noitpmeder wrote: post #217
bhouston wrote: post #209

Earlier quoted context omitted.

> They’ve made an interesting proposal around using 1600 GameStop locations for fulfilment. Is that really an advantage? Fulfilment is always handled by a lot of places for the big e-retailers for returns, which is similar to what eBay needs for sellers. How much does Staples charge for its Amazon return fulfillment where you don't even need to wrap up the item? It is really popular: https://www.staples.ca/a/learn/am…

My kneejerk is that most consumers these days expect delivery for items purchased online, and allowing them to pick up their items at a brick and mortar probably isn't the issue. Now, dropping off items you're selling? That probably removes a decent hurdle for many first-time/one-time users who aren't familiar with shipping (what box/label/insurance/padding/...).

> My kneejerk is that most consumers these days expect delivery for items purchased online

100%.

> Now, dropping off items you're selling?

This is what Staples is offering to Amazon but for returns - quite similar. And they could offer them to eBay as well I am sure. You do not need your own chain of brick and mortar stores to do this and I am sure the cost per drop off would be cheaper with Staples than your own chain that only serves you.

GameStop is a game of constant pivots that sound good to its meme-believers that do not really work in the real-world.

Re: GameStop makes $55.5B takeover offer for eBay

#222

Post by jollyllama »

GaryBluto wrote: post #128
kome wrote: post #39

ebay is still "old internet", and genuinely useful and well built. enshittification is incoming...

Have you used eBay in the last few years? It's awful for sellers and awful for buyers. This is coming from somebody who buys on eBay twice a month on average.

And yet, it's still the place to go to buy anything secondhand or used. I'd go so far as to say eBay could be nationalized under the Defense Production Act due to the critical role it plays in manufacturing by keeping obsolete manufacturing machines running.

Re: GameStop makes $55.5B takeover offer for eBay

#223

Post by unixhero »

dpoloncsak wrote: post #187
sspiff wrote: post #96

Earlier quoted context omitted.

There is precedent for this kind of trickery being played. For example, Honeywell acquired Garrett AiResearch, a well known manufacturer of turbochargers for combustion engines, through a series of mergers. Later on, it loaded them up with debt (over $1.5 billion, mostly asbestos related indemnity obligations from other parts of the business), before spinning them out as an independent entity again. Two years later,…

I believe this is what they call the 'Texas Two-Step'

Sure it is not a Kansas City shuffle?

Re: GameStop makes $55.5B takeover offer for eBay

#224

Post by consp »

getnormality wrote: post #212
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.

> the should-be-illegal process of putting debt on the acquired company's balance sheet. I agree it's weird but ultimately the check against dumb lending is natural consequences for the lender, right? If you ask me for billions in loans for your zero revenue company and I give it to you, whose problem is that but my own?

In the modern world if you are a bank you will be bailed out eventually, thus your problem becoming everyone's problem.

Re: GameStop makes $55.5B takeover offer for eBay

#225

Post by SkyeCA »

noitpmeder wrote: post #217
bhouston wrote: post #209

Earlier quoted context omitted.

> They’ve made an interesting proposal around using 1600 GameStop locations for fulfilment. Is that really an advantage? Fulfilment is always handled by a lot of places for the big e-retailers for returns, which is similar to what eBay needs for sellers. How much does Staples charge for its Amazon return fulfillment where you don't even need to wrap up the item? It is really popular: https://www.staples.ca/a/learn/am…

My kneejerk is that most consumers these days expect delivery for items purchased online, and allowing them to pick up their items at a brick and mortar probably isn't the issue. Now, dropping off items you're selling? That probably removes a decent hurdle for many first-time/one-time users who aren't familiar with shipping (what box/label/insurance/padding/...).

> Now, dropping off items you're selling?

A place that you could take items and have them packed and shipped for you would remove an enormous hurdle for new eBay sellers. It's easily the most annoying part of the entire process.

Hell, maybe they could even list items for people? Like a massive digital pawn shop.

I could see this really working out for them if they do it right.

Re: GameStop makes $55.5B takeover offer for eBay

#226

Post by eloisant »

graemep wrote: post #192
hdgvhicv wrote: post #4

Earlier quoted context omitted.

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.

They are paying half in GameStock equity. They will issue new shares so they will buy Ebay of $55bn, but add only $20bn debt. 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…

It that's bad for GameStock shareholders, surely they'll vote against it?

Re: GameStop makes $55.5B takeover offer for eBay

#227

Post by airstrike »

Animats wrote: post #117
ceejayoz wrote: post #15

Earlier quoted context omitted.

Isn’t that just a https://en.wikipedia.org/wiki/Leveraged_buyout ?

Yes. See [1] for an overview of how this works. When the SEC filing is made, we'll get to see how the deal is structured. The $20 billion from TD Securities becomes a debt obligation of the combined company. There's a tax break in equity to debt conversion, and a second tax break for carried interest. [2] There may be a preferred stock deal or debt refinancing so that TD gets their $20 billion back. Usually, the priv…

No, it's not a leveraged buyout

Re: GameStop makes $55.5B takeover offer for eBay

#228

Post by fasteo »

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.

>>> should-be-illegal process of putting debt on the acquired company's balance sheet

This is a basically a leveraged buyout (LBO). All private equity works this way. Yes, it should be illegal, or at least heavily limited.

I highly recommend this book: "Plunder: Private Equity’s Plan to Pillage America"

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