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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

#411

Post by firebot »

fasteo wrote: post #228
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"

It's absolutely an LBO. The leverage is maximizing debt to equity. That debt is then transferred to the new entity.

It's how they destroy companies while making billions in private profit. They over leverage them. Accrue debts. Sell of equity. Wash, rinse, repeat until bankrupt.

Re: GameStop makes $55.5B takeover offer for eBay

#412

Post by taeric »

Eisenstein wrote: post #402
taeric wrote: post #329

Earlier quoted context omitted.

I mean, if I'm allowed to just make up silly hypotheticals, I can easily justify anything. Say I raise money for a friend to buy a house and they proceed to rent it out to meth dealers. The friend is the one on the hook for the loans, of course; but would I not be on the hook for at least a reputation hit such that I can't do that again? Or do we think folks can get away with that sort of poor judgement forever?

If you give the friend the money as a gift, you have nothing to do with it, right? if you give it to him as a loan to inflate his assets and don't disclose that then you are committing a Federal crime.

I didn't give any money in that hypothetical. Rather, I convinced a lot of other people to give them the loan. That is, largely, exactly what fundraising is. You convince other people to give money to someone or something.

If people are regularly doing this at my request, and it is constantly going to someone that just burns the money, how are people still taking my requests?

Re: GameStop makes $55.5B takeover offer for eBay

#413

Post by altcognito »

c22 wrote: post #401
SkyeCA wrote: post #225

Earlier quoted context omitted.

> 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.

Actual pawn shops already do this, though.

Yeah, but now with a brand

Re: GameStop makes $55.5B takeover offer for eBay

#414

Post by Forgeties79 »

dgellow wrote: post #408
Forgeties79 wrote: post #372

Earlier quoted context omitted.

Yes and it was 1) incredibly notable, 2) 13 years ago, 3) in another country, and 4) following one of their worst performing products ever. Iwata's (maybe voluntary) temporary pay cut was big news because of how exceptional it was.

I was giving you a name, given you said you cannot name one. I do not disagree it is an exception

“Few CEO’s in the US” was the context just for clarity

Re: GameStop makes $55.5B takeover offer for eBay

#415

Post by kjs3 »

If it means eBay stops front-loading every search I make with car parts in thier latest market 'pivot' I'm for it. They can dispense with shoving the tacky 'live auction' stuff and constant 'are you sure you don't want to sell something', even better.

Re: GameStop makes $55.5B takeover offer for eBay

#416

Post by [deleted] »

Forgeties79 wrote: post #158
fontain wrote: post #83

Earlier quoted context omitted.

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.

Few CEO’s in the US are rewarded for longterm thinking when there are unsustainable quarterly gains to be made. GameStop also has a strange history, especially the last decade, that no one could possibly describe as “cautious” or “planning longterm.” I also can’t name a single CEO who had the mentality of “I’m rich enough to make personal/financial sacrifices for the good of the company.” That’s simply not how things…

[deleted]

Re: GameStop makes $55.5B takeover offer for eBay

#417

Post by solumunus »

Forgeties79 wrote: post #372
dgellow wrote: post #280

Earlier quoted context omitted.

Nintendo CEO cutting his salary in half to avoid firing employees https://www.cnbc.com/2024/02/13/nintendo-ceo-once-halved-sal...

Yes and it was 1) incredibly notable, 2) 13 years ago, 3) in another country, and 4) following one of their worst performing products ever. Iwata's (maybe voluntary) temporary pay cut was big news because of how exceptional it was.

Ryan Cohen doesn’t even take a salary. I guess that’s extremely notable then?

Re: GameStop makes $55.5B takeover offer for eBay

#418

Post by solumunus »

orlp wrote: post #7

GameStop doesn't have (even close to) $55.5B. Their offer from the letter is literally impossible: > Our offer is $125.00 per share, comprising 50% cash and 50% GameStop common stock Even if you magically included all existing GameStop stock in the offer, it still would not comprise 50% of $55.5B. EDIT: looks like it's not impossible and I misunderstood. It's a proposed change of leadership with a $25B injection of c…

It’s wild to me that you believed that they would make an impossible offer.

Re: GameStop makes $55.5B takeover offer for eBay

#419

Post by maxk42 »

i_think_so wrote: post #81
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…

GameStop has zero debt and billions in cash on its books. It is not a stretch for them to be making this offer. It really does make sense here for both sides.

Re: GameStop makes $55.5B takeover offer for eBay

#420

Post by airstrike »

panick21_ wrote: post #91
sschueller wrote: post #58

Earlier quoted context omitted.

But if it all goes sour nobody will be held accountable and two not one company are ruined. I don't see how such leveraged acquisitions should be legal.

Is there anywhere a good breakdown of these leveraged acquisitions. Like a video or something that breaks down how that exactly works and why its legal and why the acquired company goes along with it. Its seems like such a strange mechanism. And the history of it.

Why would it not be legal? You can take out any loan, so long as the creditor believes in your ability to pay it back with interest, which informs how it gets priced. This is basically Finance 201 and everyone is up in arms ITT
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