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GameStop makes $55.5B takeover offer for eBay
281–290 of 731 posts
Re: GameStop makes $55.5B takeover offer for eBay
#282Earlier quoted context omitted.
I mean, it is functionally the same as home loans? Would you be proposing a carve out that buying a house or car is ok this way, but nothing else?
Home owns are owned by people, not the home itself. If someone fails to pay a loan, their own credit score will be impacted For these PE loans, its the new company that takes on the debt, not the buyer. Essentially any broke person can "afford" any trillion dollar company this way
Home loans are secured by the asset (the home). It's comparable to stock, but it's a less liquid asset.
Any broke person can afford a trillion dollar loan, if they can convince the bank that their house is worth 1.8 trillion dollars. But is that really possible?
Loan companies do due diligence so if GameStop is $A and eBay is worth $A + $B, then so long as $A/$B remains the same, the acquiring company owns two assets worth the full price of the loan.
It doesn't seem to be a scam to me. Am I missing something?
Re: GameStop makes $55.5B takeover offer for eBay
#283Gamestop is one of the companies that I refuse to do business with. eBay is a company that I am reluctant about, but use anyway.
If this goes through, that will be the final straw that gets me to stop using eBay entirely. That would probably be for the best.
Re: GameStop makes $55.5B takeover offer for eBay
#284Earlier quoted context omitted.
This is a fundamental misunderstanding of the US employment model. Businesses can do all sorts of dumb things that end up making them unable to continue to invest in employees. The check against that is the greedy owners. Regulations designed to ensure businesses never take risky bets lest they have to lay people off would be a nightmare of unintended consequences and surely in aggregate hurt employment.
I assume the person you answered is saying that level of risk taking should be regulated. Not that no level of risk should be allowed if they have to fire people. Surely there is a point where you want some guardrails, so the C-suite has to at least take in account their employees as part of their risk assessment
I don’t see it.
Is the idea that big companies take too many risks today? If so, I’d love to see data, because the usual knock on big companies is they become dinosaurs and risk-averse, and therefore stop innovating and eventually get displaced by upstarts.
Re: GameStop makes $55.5B takeover offer for eBay
#285Earlier quoted context omitted.
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?
Do they get a vote?
Re: GameStop makes $55.5B takeover offer for eBay
#286Earlier quoted context omitted.
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 cha…
> This is what Staples is offering to Amazon but for returns
Yes, and usps stores and Whole Foods do that for Amazon in the US as well. The difference is that each of those items don’t need to be individually packaged and shipped to unique locations. My local USPS put all the returns for the day in a giant bin and an Amazon driver picks them up.
I think the cost of labor and liability involved in having a local retail worker wrap, label, and ship every package would be an order of magnitude higher than shipping alone and destroy any value in offering it.
Re: GameStop makes $55.5B takeover offer for eBay
#287Earlier quoted context omitted.
Liquid Assets: May 2020: $570.3 million Jan 2026: $9.013 billion
Who would down vote this? It’s true. Can people here really not keep their emotions in check enough to admit clearly obvious facts?
The entire conventional zeitgeist is denying plain truths that hurt your self image.
It seems consistent that the same thing would happen here.
Re: GameStop makes $55.5B takeover offer for eBay
#288Earlier quoted context omitted.
I mean, it is functionally the same as home loans? Would you be proposing a carve out that buying a house or car is ok this way, but nothing else?
Home owns are owned by people, not the home itself. If someone fails to pay a loan, their own credit score will be impacted For these PE loans, its the new company that takes on the debt, not the buyer. Essentially any broke person can "afford" any trillion dollar company this way
Leaving aside that the new company is the buyer; the point remains that home and car loans are leveraged loans. With the main asset in the leverage being that which is being bought. Defaulting on that loan results in the assets going to the lender.
If a lender builds a pattern of lending to people that can't make the payments, that lender will take a hit. If we think that isn't happening, why? And how could we return us to that?
Or, back to my question, how would you structure a legal framework where some loans can be done this way, but others could not? (I can think of a few ways, largely curious if I have a blind spot here.)
Re: GameStop makes $55.5B takeover offer for eBay
#289Earlier quoted context omitted.
>>> 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"
I mean, it is functionally the same as home loans? Would you be proposing a carve out that buying a house or car is ok this way, but nothing else?
It would be functionally the same as what you described if the parent company took on the debt, but that’s not how they do it. They make the purchased entity take on the debt. Hence why you often see mass layoffs in the company that was acquired soon after the deed was done. The company has so much debt it can barely function and the easiest way to pay some back is redirecting salaries at it.
Then once you realize why private equity firms do this, how their leaders have extreme monetary incentives to squeeze value out of companies in ways not limited to this, you realize why it’s insane how we have basically zero regulation on it.
Re: GameStop makes $55.5B takeover offer for eBay
#290Earlier quoted context omitted.
I mean, it is functionally the same as home loans? Would you be proposing a carve out that buying a house or car is ok this way, but nothing else?
Home owns are owned by people, not the home itself. If someone fails to pay a loan, their own credit score will be impacted For these PE loans, its the new company that takes on the debt, not the buyer. Essentially any broke person can "afford" any trillion dollar company this way
Fair point, it's a corporation taking out the loan so there's nobody to go after if the company goes under the way there is if the value of your house tanks and you stop paying your mortgage. But doesn't the bank take that risk into account when deciding whether to issue the loan? Why should that be illegal?