Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

eBay Rejects GameStop's $56B Takeover as Not Credible

bloomberg.com

Post reply on HN
Print view View original

51–60 of 251 posts

Re: eBay Rejects GameStop's $56B Takeover as Not Credible

#51

Post by jader201 »

danvayn wrote: post #24
tombert wrote: post #2

I really thought it was going to be the other way around. I am quite confident that if GameStop bought eBay, they would ruin it in the same way that K-Mart buying Sears ruined that company. I could be wrong, I'm not a business person, but it seems kind of obvious that a company like GameStop, whose current existence appears to be due to a weird short squeeze anomaly, is not a sustainable business.

The TD Bank securities commitment of 20B to finance the deal and GameStop having a market cap far below the acquisition cost suggests that buying eBay would’ve been very problematic and risky for investors. But comparing it to K mart buying sears isn’t really accurate to me. Like yeah, GameStop clearly fits into the death of retail, and acquiring eBay does increase their market visibility or presence. Beyond that, wh…

I'm not sure I follow/buy the premise of moving second-hand sales to a physical building as beneficial to eBay.

If I'm looking for X, I'd much rather go to an online store, where I have access to several listings of X at varying prices and condition, vs. make a trip to a physical store, see if they have X, and hope that the condition and price matches my expectations.

Maybe if I'm not looking for X, and just want to browse a bunch of stuff (e.g. yardsale/flea market style), then a physical store could make sense.

But, to me, having this middle-man physical presence was already a problem, and eBay solved this.

I just don't feel like eBay needs GameStop.

Now, whether GameStop needs eBay is a different story. But GameStop is in trouble for two reasons:

1. Video games -- and therefore video game sales -- are moving to digital.

2. Physical stores are becoming a thing of the past for retail transactions.

eBay doesn't need GameStop's troubles.

Re: eBay Rejects GameStop's $56B Takeover as Not Credible

#52

Post by harrall »

m348e912 wrote: post #22
tombert wrote: post #9

Earlier quoted context omitted.

I guess it comes to management. I agree that if GameStop were basically rebranded as eBay brick and mortar stores, that might work. I guess I just feel like if it were GameStop itself that were managing it then it would be unlikely to actually work. It's not like digital storefronts are new ; I think GameStop should have been pivoting the moment that Steam started getting traction.

You guys might not have seen the recent interviews (last week) with gamestop CEO Ryan Cohen. Gamestop has already pivoted, game and console sales are cyclical and hard to base a business upon. They have leaned hard into collectables as a way to expand their business and retail model. I am unsure how a Gamestop/eBay storefront would do. Physical manifestations of "eBay stores" have existed in the past and none of them…

I don’t know about everybody else but I both sell and buy on eBay items that are more niche but not totally bespoke like on Etsy (e.g. photography equipment or specific hats).

Which means an eBay store would never make sense for my type of buyer or seller because I would just go to one of the many other existing entrenched retailers for regular things.

I know eBay pushes hard for regular retail but ultimately I see it as a marketplace for less fungible items and that’s what it excels at. Regular retail for regular items is easier because the user experience is always standard.

GameStop is trying to sit in the middle and trying to move product that is a little more fungible (previously used games and now more trading cards and collectibles) but I just don’t know how big of a market it is when you have to factor brick and mortar upkeep. I don’t want them to take down eBay in an experiment.

Re: eBay Rejects GameStop's $56B Takeover as Not Credible

#53

Post by rtkwe »

colechristensen wrote: post #5
tombert wrote: post #2

I really thought it was going to be the other way around. I am quite confident that if GameStop bought eBay, they would ruin it in the same way that K-Mart buying Sears ruined that company. I could be wrong, I'm not a business person, but it seems kind of obvious that a company like GameStop, whose current existence appears to be due to a weird short squeeze anomaly, is not a sustainable business.

Gamestop turning into an eBay storefront makes a lot of sense to me and this seemed to be a very rational step to take when the short squeeze anomaly left them with billions in the bank and a business model that no longer makes very much sense with physical game sales being eaten by digital-only sales along with the potential decline of the console. They already have the position of used buying and sales, extending t…

I've yet to see a convincing vision of what an eBay physical store looks like that doesn't kind of boil down to a UPS store. The vast majority of their business comes from 3rd party listings and the only real stock they have and sell are in the eBay refurbished line. I'm really not convinced of what a successful eBay store would even be there for.

I've seen some say for authentication but staffing employees able to perform that authentication at even a fraction of existing GameStop stores would be extremely expensive (unless it's terrible authentication) so it again devolves to basically being a UPS store but for eBay shipping items out to be authenticated. Similar to what GameStop does with Pokemon cards and PSA grading except you can't really slab a Rolex or handbag so the authentication is only good so long as the good remains in the hands of the authenticator.

The only small service I think they could offer is a way for sellers to certify what's being shipped to avoid contests, but having that in every GameStop store is also very expensive for a cost they currently just shift onto sellers by siding with the customer. eBay could easily implement that if they wanted by partnering with UPS stores or a program where sellers video the packing or something.

Re: eBay Rejects GameStop's $56B Takeover as Not Credible

#55

Post by Aurornis »

qrush wrote: post #16

As a avid eBay customer I am pretty relieved. I buy 2-3 items a month and was selling for the last 2 years on the platform. It's come such a long way and is really a great, streamlined experience. Of course I'm sure folks that make their living off their stores & sales will have different opinions, but I'd say as a routine customer and seller it doesn't need an external company's takeover pressure on it.

I buy and sell through eBay about once a month and I agree. eBay isn't perfect but over several hundred transactions and a few disputes that were settled fairly I've had a good experience. I know it's possible to have a bad experience and I'm not discounting those stories, but it's not the standard eBay experience.

GameStop was trying to do a Private Equity style takeover. Everyone hates it when PE companies do that, but GameStop is an lol memestock so that fact was overlooked with all of the to the moon comments. I do not want any platform I use being taken over by in a highly leveraged takeover, especially not by GameStop.

Re: eBay Rejects GameStop's $56B Takeover as Not Credible

#56

Post by at-fates-hands »

TravisJamison wrote: post #43
qrush wrote: post #16

As a avid eBay customer I am pretty relieved. I buy 2-3 items a month and was selling for the last 2 years on the platform. It's come such a long way and is really a great, streamlined experience. Of course I'm sure folks that make their living off their stores & sales will have different opinions, but I'd say as a routine customer and seller it doesn't need an external company's takeover pressure on it.

Are you trading collectibles? I’m just genuinely curious what someone would buy with 2-3 transactions a month.

I'm the same way as OP. I'll go clean out my basement, find a load of old tech and just put it up in a bundle or sell it individually for dirt cheap. Likewise, I buy a lot of stuff like minimal wallets, micro-electronics like charging cables, dongles for my work laptop, phone cases. Just typically a lot of knick knacks or older tech stuff. There's a booming economy for old walkmans and cd players. Same thing with higher end audio stuff like older DAC's, speakers, amps. A lot of unique stuff you can't find on Amazon or elsewhere.

Re: eBay Rejects GameStop's $56B Takeover as Not Credible

#57

Post by mh- »

boringg wrote: post #33
cmiles8 wrote: post #10

Well if you’ve seen the CNBC interview with the GameStop CEO he couldn’t answer basic questions about the deal so the outcome here isn’t surprising. The interview was so bad the first time I saw it I thought it was some sort of satire bit. No, it was real and the commentators were literally speechless.

CNBC hard fumbled in that they didn't even understand what the offer was. The CEO put that on full display and embarrassed the hosts basic knowledge of finance. It was hard to watch.

Can you explain your thought process here? Perhaps we're "embarrassing my basic knowledge of finance", but I wasn't able to follow his math either.

Re: eBay Rejects GameStop's $56B Takeover as Not Credible

#58

Post by rtkwe »

applfanboysbgon wrote: post #42
boringg wrote: post #17

Earlier quoted context omitted.

Please see: Leveraged Buy Out. For the benefit of all the people on this thread not understanding what the proposal is for the acqusition: "A leveraged buyout (LBO) is the acquisition of a company (typically by a private equity firm) using a significant amount of borrowed money (debt) to meet the purchase price, often 60% to 90% of the total cost. The target company’s assets are used as collateral for the loans, whic…

Everybody understands the proposal. They also understand that an offer of $20 billion loan + $7.5b cash in hand + stock in Gamestop valued by the market at $11b = $37.5b, which is < $55b, a discrepancy Cohen has not been able to account for. Ebay also understands that leveraged buy-outs are a death sentence, and that saddling its operations with $20b of debt in exchange for gaining a dead business like Gamestop would…

Also when you count that 7.5B cash on hand as part of the deal to me that's to some extent double counting to include it and the current market value of all of GME's stock. At least part of the stock's value comes from the existence of the cash so it's not wholly separate from the value of the stock.

Re: eBay Rejects GameStop's $56B Takeover as Not Credible

#59

Post by DSMan195276 »

colechristensen wrote: post #5
tombert wrote: post #2

I really thought it was going to be the other way around. I am quite confident that if GameStop bought eBay, they would ruin it in the same way that K-Mart buying Sears ruined that company. I could be wrong, I'm not a business person, but it seems kind of obvious that a company like GameStop, whose current existence appears to be due to a weird short squeeze anomaly, is not a sustainable business.

Gamestop turning into an eBay storefront makes a lot of sense to me and this seemed to be a very rational step to take when the short squeeze anomaly left them with billions in the bank and a business model that no longer makes very much sense with physical game sales being eaten by digital-only sales along with the potential decline of the console. They already have the position of used buying and sales, extending t…

> They already have the position of used buying and sales, extending that into in store receiving and listing of items on eBay makes sense.

Why do they need to buy eBay to do that?

Re: eBay Rejects GameStop's $56B Takeover as Not Credible

#60

Post by Imustaskforhelp »

alternative link on archive.org using htmlpipe[0] :https://web.archive.org/web/20260512164713/http://serjaimela...

Kind reminder to donate to archive.org: https://archive.org/donate

This helps because google captcha now sometimes require android phone qr code scanning etc. so I have uploaded the article on archive.org

[0]: I am creator of htmlpipe which archives archive.is pages on archive.org

(I was gonna add it as a comment below bstsb but it seems to have been detached now so can't comment on it)

Post reply on HN