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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

#621

Post by itsmek »

matwood wrote: post #277
boringg wrote: post #236

Earlier quoted context omitted.

Ah-hem SVB?

SVB was not bailed out. Depositors were made whole (as they should be), but shareholders were completely wiped out (as they should have been).

Eh, they were kind of bailed out in that uninsured deposits were made whole. Not saying they shouldn't have done it (fighting contagion is like fighting fire, earlier is prob better and potentially cheaper in the end if your confidence bluff succeeds) but "bail out" is a flexible enough term that electing to cover uninsured deposits at the expense of uninvolved parties feels like it qualifies to me. Plus it has some of the same smells as other bailouts - weighing moral hazard vs systemic risk.

Re: GameStop makes $55.5B takeover offer for eBay

#622

Post by 59percentmore »

SwellJoe wrote: post #609
59percentmore wrote: post #604

Earlier quoted context omitted.

https://www.macrotrends.net/stocks/charts/GME/gamestop/eps-e... There's something else going on. The other companies known for being meme stocks are doing substantially worse in terms of share price. AMC is below what it was before early 2021, down 90% from its high. That holds for most of them. Bed, Bath, and Beyond famously went bankrupt. Meanwhile, yeah, Gamestop is down about 75% from its high. But it's also 2.5x…

A sinking company buying a healthy company several times larger and more profitable doesn't make sense. The eBay board and shareholders would be crazy to participate in this fantasy. GME shareholders are already known to be of questionable judgment, so whatever they do is SNAFU. So, it's not surprising GameStop would try something crazy, what's surprising is anyone is taking it seriously.

I don't know what your issue with Gamestop is, but calling it "a sinking company" is wildly inaccurate, bordering on delusion.

Re: GameStop makes $55.5B takeover offer for eBay

#623

Post by dlcarrier »

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…

Both stocks went up in value after the announcement, so it's a good sign that if it comes to it, eBay stock holders would vote for a merger, because they value the combined company at at least the sum of their parts.

Re: GameStop makes $55.5B takeover offer for eBay

#624

Post by Forgeties79 »

59percentmore wrote: post #613
Forgeties79 wrote: post #175

Earlier quoted context omitted.

I imagine the vast majority of us do not have a problem understanding smaller companies can buy larger ones. Most of us are just incredulous that anyone is taking GameStop, especially Cohen, seriously.

Why wouldn't they? Before he showed up, Gamestop had years of negative earnings per share. They haven't had a negative EPS quarter in almost 2 years, now. That seems like a serious turnaround.

You’re omitting the fact that they’ve had declining revenue YoY 4 years now, with no sign this won’t be year 5. Their liquidity is primarily the result of leveraged debt and sold off shares. They have had to seriously downsize, including shuttering tons of brick and mortars.

You’re picking one single metric that’s not even consistent for 2 years to assess the health of the company. It feels rather cherry-picked. The whole story is very rough for them right now, they’re in trouble.

Re: GameStop makes $55.5B takeover offer for eBay

#625

Post by topspin »

greggsy wrote: post #589
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…

EBay also has some very accurate data about market pricing for second hand goods and what categories are at greater risk of being returned, which reduces the risk of holding riskier items. EDIT: regarding the CEO, you should find the interview where he’s challenged about funding.

The interview is here: https://youtu.be/Bmj2PaxX24E

Instant classic.

Re: GameStop makes $55.5B takeover offer for eBay

#626

Post by Nifty3929 »

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.

It is not at all clear to me why people get upset about using borrowed money on the balance sheet of the acquired company.

Say company B wants to buy company A. Company A is worth $20B, but the buyer doesn't have that much, and the original owners/shareholders want to get paid. So Company A takes out a $20B loan, paying out the original owners, making that company worth $zero. Now Company B gets it - it's still worth zero because of the fat loan, but now Company B is the owner. I don't feel like anybody got taken advantage of in this financing model.

In fact, this is pretty close to what happens in the US real estate market. When I buy a house I take out a loan against that house. It's non-recourse, so it's very much like the house borrowed the money, not me. In any case, I got the house with a lot less money than the purchase price. Sometimes nearly zero from me in fact.

I do understand why people get angry about what often happens next - layoffs and such - but I think that's very independent of the financing used to purchase the company. The acquirer could pay all cash using money from it's own bank account, and then still lay a bunch of people off - and in fact that often happens.

Re: GameStop makes $55.5B takeover offer for eBay

#628

Post by arcticbull »

59percentmore wrote: post #596
arcticbull wrote: post #549

Earlier quoted context omitted.

They haven't had a genuinely good year in the last 15 years. Their TTM revenue is down 66% from what it was in 2012. In nominal dollars. In real dollars it's down 75%. https://www.macrotrends.net/stocks/charts/GME/gamestop/reven...

And yet... https://tradingeconomics.com/gme:us:eps (Macrotrends has it, too.) What's more important, revenue or profit?

Look at the 10Y. Still crap. No matter how you look at it this company is a dog.

Re: GameStop makes $55.5B takeover offer for eBay

#629

Post by b40d-48b2-979e »

turtlesdown11 wrote: post #481
asynchronous13 wrote: post #470

Earlier quoted context omitted.

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

What can you expect from an AI generated comment? Correctness?

Re: GameStop makes $55.5B takeover offer for eBay

#630

Post by crazygringo »

shaftway wrote: post #599
crazygringo wrote: post #575

Earlier quoted context omitted.

Ebay commissions are not that high, 13.25% for most items. The barrier to listing huge amounts of merchandise is not the commission, but rather the amount of labor it takes to list and price everything and pack and ship it and deal with refunds and returns for items that turn out to have problems. And how a lot of items are only economical to sell locally, because when you add in shipping costs it approaches the valu…

> Ebay commissions are not that high, 13.25% for most items. 13.25% isn't zero. > The barrier to listing [is] the amount of labor it takes to list and price everything GameStop has a surprising amount of technology around their pawnshop activities. My son traded in his laptop last month and they had him wipe it, enable developer mode, and plug it in to do automated tests and make sure they knew what they were getting…

I'm just saying, 13.25% isn't the barrier here to making this work.

And shipping things to a "GameStop near you" does not cost pennies, and most people hate having to pick up packages. The reason that can be cheaper for regular stores is because they're distributing from central warehouses to those stores anyways. If GameStop is holding inventory trapped in all these physical stores, shipping an item from one store to another is no cheaper than shipping it directly to the customer -- e.g. it's edge node to edge node, not central node to edge node.

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