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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

#481

Post by turtlesdown11 »

asynchronous13 wrote: post #470
rahimnathwani wrote: post #297

Earlier quoted context omitted.

"I think it made about a billion dollars in profit" It raised over a billion dollars of capital (i.e. issued shares in return for cash). It did not make a billion dollars in profit (and has never had a year when it did).

Key financial results for Gamestop from the recent fiscal year (2025–2026) include: Net Income: $418.4 million Gross Profit: $1.196 billion Total Revenue: $3.63 billion Operating Income: $285.9 million

Operating income was $232.1 million, not $285.9 million.

https://investor.gamestop.com/news-releases/news-details/202...

That total revenue also declined 5% YoY

Re: GameStop makes $55.5B takeover offer for eBay

#483

Post by rahimnathwani »

CobrastanJorji wrote: post #477
intuitionist wrote: post #390

Earlier quoted context omitted.

Worth also pointing out though that if you can sell new shares above intrinsic value that is accretive to existing shareholders. Dilution isn’t always a bad word. (It’s bad for the people buying new shares.)

Well, partly it's an audience thing. Hacker News has a lot of folks who work at tech startups, and if you work at a tech startup, dilution is nearly always a very bad word for you.

If you work at a tech startup then you probably hope your company raises an additional round of funding, i.e. you hope you get diluted.

Re: GameStop makes $55.5B takeover offer for eBay

#484

Post by floxy »

Ajedi32 wrote: post #307
awakeasleep wrote: post #305

Earlier quoted context omitted.

The way I’m reading your question, it seems like you are looking for the law to follow philosophically consistent principles. That is simply not the case and lawmakers can make any kind of law to shape the society how we wish. If leveraged buyouts are creating problems for the country, then it’s totally valid to make them illegal in certain cases.

The question I'm asking is: what problem? If a bank takes a risk and that risk doesn't pay off how exactly is that society's problem? And yes, I do think laws should be based on consistent principles. I'm surprised you consider that a controversial point...

>I do think laws should be based on consistent principles.

https://repository.law.wisc.edu/s/uwlaw/item/27617

Re: GameStop makes $55.5B takeover offer for eBay

#485

Post by airstrike »

Animats wrote: post #471
airstrike wrote: post #227

Earlier quoted context omitted.

No, it's not a leveraged buyout

Sure it is. The acquirer is borrowing money for the buyout, and the debt will become a debt of the acquired/merged company. That, by definition, is a leveraged buyout.

That is not the definition of a leveraged buyout.

This is a public-to-public merger. Some mergers and acquisitions are financed with debt. That does not make them leveraged buyouts.

LBOs are private equity deals in which there's no issuance of public stock. The equity portion is, well, private equity.

Source: I've advised over 100+ clients on billions worth of M&A and LBO deals in my time as an investment banker in New York.

Re: GameStop makes $55.5B takeover offer for eBay

#487

Post by taeric »

Eisenstein wrote: post #476
taeric wrote: post #429

Earlier quoted context omitted.

Yes. That doesn't change my question, here. You can arrange to bootstrap another company. It could go bust in a way that you are not on the hook for any money, but you should be on the hook for the things you did. That is the entirety of my point. The hypotheticals being pushed on this thread have a foregone conclusion that the arranging party is completely free of any hit.

The hypotheticals seem to be in line with reality though. This business model works because the people who make money are the ones who are in control of whether to do it. Liquidating a large company in bankruptcy can get a lot of the money back for the investors while leaving a smoking ruin where it used to be generating economic value.

Are they, though? There are certainly some cases where it has happened, but I don't think it has been established that that is the norm.

Naive searching on the term shows that they common in PE, and they do have a worse default rate at 20% over 2% otherwise. Certainly something to look at more closely. And I would be nervous being party to one. That said, 80% success is still better than what some companies are looking at otherwise.

Re: GameStop makes $55.5B takeover offer for eBay

#488

Post by 59percentmore »

DSMan195276 wrote: post #352
59percentmore wrote: post #345

Earlier quoted context omitted.

You asked what could be improved with Gamestop. Public knowledge of Gamestop locations is a boon if people don't know where your existing fulfillment centers are.

Yes but I don't need to go to my nearest fulfillment center if they ship everything to my house, that's why I don't know where it is. What do you think people need to visit fulfillment centers to do?

Buyers? Sure. (Unless you're like me and paranoid after getting porch-pirated.)

Sellers...?

Re: GameStop makes $55.5B takeover offer for eBay

#489

Post by brian-armstrong »

qaq wrote: post #456
giancarlostoro wrote: post #240

The original shorting of GameStop back in 2021 gave them a bit of a boost back into the green. While people were doing the GME to the moon, GameStop made more shares to sell, and paid off a bit of its debts, I think it made about a billion dollars in profit, they're still struggling, but it helped prolong their life. A friend of mine also pointed out and this made it click for me that it makes 100% sense, GameStop is…

thinking back to 2021 it really shows we need some reform around brokers being able to land their customers stock to short sellers without any kind of consent. Also same shares should not be shortable multiple times ...

What? Most (all?) platforms let you opt out of this, and you receive payment when your shares are borrowed. And shares are fungible, how would it matter if one share is borrowed by 10 people or by none?

Re: GameStop makes $55.5B takeover offer for eBay

#490

Post by overfeed »

kibwen wrote: post #335
ryandrake wrote: post #324

Earlier quoted context omitted.

Consignment doesn't offer the seller a very good monetary deal, though. They're essentially a junk hauler that might pay you a few bucks. We all have that pile of old computer components that we could probably sell piece by piece for $400 on eBay, $200 on Craigslist/FB Marketplace, $100 at a yard sale, and maybe if you're lucky a consignment place will give you a $40 for it all.

> Consignment doesn't offer the seller a very good monetary deal, though. They're essentially a junk hauler that might pay you a few bucks. You've just unflatteringly, yet accurately, described GameStop's business model for the past decade.

The only missing bit is the meme-stock side of business where emoji-slinging, HODL'ng bag-holder, retail investors with no actual investment strategy fund the whole operation. The amount of misinformation pumping $GME on social media is staggering.
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