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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

#651

Post by iinnPP »

sanswork wrote: post #535
iinnPP wrote: post #503

Earlier quoted context omitted.

GameStop in Canada owns stores in active malls and in standalone locations. Hard to see the store empty, even at 1030am on a weekday in November.

Gamestop in Canada isn't owned by Gamestop in the US. They were also historically unprofitable so people might be in the stores but they aren't buying enough.

Now that you mentioned it, I seem to recall that news. The point stands that in some areas, that type of store can still perform.

Perhaps they would come to an agreement.

Re: GameStop makes $55.5B takeover offer for eBay

#652

Post by hattmall »

ball_of_lint wrote: post #559
sanswork wrote: post #533

Earlier quoted context omitted.

>A fraction of that profit does come from interest income. More than half of it came from interest income. Gamestop has been unable to grow revenue since Cohen took over, failed initiative after failed initiative. The only thing saving them is their meme stock nature and a legion of people willing to throw good money after bad allowing them to dilute shareholders to build a warchest. They have increased profit by clo…

Well hey, what do you think about them buying eBay? eBay seems to think a lot of the value is in verification - grading cards, authenticating watches, shoes, handbags. GameStop has a similar business in collectibles and could provide eBay with a physical footprint that would let a lot of that verification happen easier, in-store.

The verification stuff is minimal. That's not where eBay makes it's bulk of money but it's a reasonable growth area. There's a huge opportunity though for eBay or someone to tie several loose ends and concepts together and have a serious competitor to Amazon.

Re: GameStop makes $55.5B takeover offer for eBay

#653

Post by [deleted] »

hn_throwaway_99 wrote: post #645
sakopov wrote: post #551

GameStop CEO was on CNBC and acted like a total dick the entire time after they asked him how financing would work for this deal [1]. It appears that he's upset that Squawk Box previously stated that GameStop is a bankrupt meme stock. This is probably one of the funniest CNBC interviews I've seen. [1] https://youtu.be/Bmj2PaxX24E

r/wallstreetbets has been having an absolute field day with this interview, gotta admit it's pretty hilarious. I guess wallstreetbets can giveth (given they're probably the primary reason Gamestock even still exists as an independent company today) and taketh away.

[deleted]

Re: GameStop makes $55.5B takeover offer for eBay

#654

Post by Panzer04 »

andruby wrote: post #260
sheepscreek wrote: post #193

Earlier quoted context omitted.

Taking a $20b loan from TD Bank + sitting on $9b CASH + GameStop stock for the rest. They’ve made an interesting proposal around using 1600 GameStop locations for fulfilment. Smart if they can make it work. Update: Numbers still don’t add to $55b - I think there’s a $14b shortfall. Not sure about how they are planning to fund that.

A company doesn't need $55bn to buy a $55bn company. They can issue new GME shares and exchange $EBAY for $GME. These are sometimes called "stock-for-stock" transactions

Basically a merger.

Re: GameStop makes $55.5B takeover offer for eBay

#656

Post by proteal »

safeimp wrote: post #428
CamelCaseName wrote: post #394

Earlier quoted context omitted.

I read that book, and my recommendation is to skip the third act, which is painfully repetitive. In fact, coming from a finance background, I didn't find the book in general to be particularly insightful, and much more ragebait / policy oriented (which makes sense given the author was a DOJ Antitrust prosecutor)

Is there an alternative you might suggest?

Barbarians at the Gate is the classic LBO book. It gives a nice mix of story and financial mechanics.

Re: GameStop makes $55.5B takeover offer for eBay

#657

Post by Panzer04 »

weard_beard wrote: post #220
sheepscreek wrote: post #193

Earlier quoted context omitted.

Taking a $20b loan from TD Bank + sitting on $9b CASH + GameStop stock for the rest. They’ve made an interesting proposal around using 1600 GameStop locations for fulfilment. Smart if they can make it work. Update: Numbers still don’t add to $55b - I think there’s a $14b shortfall. Not sure about how they are planning to fund that.

GameStop has a standing approved agreement to issue up to a billion new shares. If you read the offer you will see it is 50% financed by GameStop stock. They threw him a hardball today in his cnbc interview on this topic. $GME stock value would plummet short term, but the combined company would revalue much higher. Current Gamestop shareholders would be diluted. They would own, proportionally, a much small slice of t…

If he gets awarded a huge number of shares for hitting market cap goals, existing shareholders are diluted to his benefit.

How is the framing wrong?

Re: GameStop makes $55.5B takeover offer for eBay

#658

Post by mcmoor »

intuitionist wrote: post #390
whamlastxmas wrote: post #357

Earlier quoted context omitted.

The TLDR for people who don't intuitively understand why: existing shareholders are diluting their stake in the company by issuing new shares and getting money for those new shares. It's simply selling part of the company. Not profit.

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.)

Yeah I'm also always confused whenever I heard that a company issues new stocks. Why would existing shareholders agree for that? If there's more comprehensive resources about this I'd love to read it.

Re: GameStop makes $55.5B takeover offer for eBay

#659

Post by Scoundreller »

happyopossum wrote: post #278
metalliqaz wrote: post #264

Earlier quoted context omitted.

Yes, exactly. In fact there were some ebay "helper" companies that made a go of it in the early 2000's. They went out of business because it doesn't add enough value. USPS created Media Mail and flat rate boxes, and UPS stores are found in nearly every community. They handle the hard part (shipping) well enough. The only thing I can think of is Gamestop positioning to become a clearing house for fan swag or gaming it…

> USPS created Media Mail Umm, that’s been around since 1938, which is a few years before the era you’re talking about…

Amazon probably wouldn’t exist if it weren’t for USPS subsidizing media mail

Re: GameStop makes $55.5B takeover offer for eBay

#660

Post by Scoundreller »

cj wrote: post #354
iwontberude wrote: post #342

Earlier quoted context omitted.

It disgusts me how eBay sellers abuse the US Post Office by stealing supplies. It’s one way to guarantee I never buy from someone again.

USPS is the only storefront I can think of that allows you to walk in, grab an unlimited amount of boxes/supplies, and walk out with no questions asked. They will even deliver boxes to your front door, for free, by simply submitting a form online. It's so easy, I'm not at all surprised that it's occasionally abused.

FedEx used to send anyone big boxes of free bubble mailers
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