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

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

#221

Post by pibaker »

avonmach wrote: post #46

Seems like a no brainer for people who want to go into a physical store without dealing with the hassle of waiting for the item to sell along with packaging and shipping.

A physical store stocked with what? EBay’s strength in today's world is its enormous base of third party sellers all over the world carrying the most niche odds and ends you can think of. Just to be able to show these seller's merchandise in stores would be a massive logistical nightmare. No physical store and certainly not the ones GameStop sized can carry a fraction of what eBay has to offer. They have to fundamentally reshape the business and throw away what made them successful if they want physical stores to make any sense.

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

#222

Post by stephen_g »

Scoundreller wrote: post #18
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.

Tbh, if you can convince someone to take your relatively worthless pieces of paper in exchange for your valuable asset, then your worthless pieces of paper are no longer worthless. Not much different than me having a bit of cash and putting 5% or 20% down to buy a home or car: now I’m a big asset and debt holder and you got some pieces of paper with dead presidents on it. That was the hard part of the deal: will (eno…

> That was the hard part of the deal: will (enough) eBay shareholders want to be GameStop shareholders.

There is no upside for eBay shareholders - a leveraged buyout makes sense if it's for 100% cash, because the buyers are taking the risk and the debt, and the sellers get the cash. But in this deal, Gamestop need to borrow the money to pay 50% to eBay's shareholders, but then the other 50% eBay's shareholders get is shares in the company that holds all that debt!?!

It would be better for eBay's investors if eBay themselves just borrowed $20bn to do share buybacks. I mean, it would still be dumb and make absolutely no financial sense (because they still hold shares in the company that holds the debt) but at least they wouldn't have the extra liability of Gamestop's dwindling business on the side.

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

#223

Post by stephen_g »

boringg wrote: post #17
yalogin wrote: post #12

Earlier quoted context omitted.

They still don’t have anywhere close to buying eBay.

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…

In a leveraged buyout you actually buy out the company so you take the risk of the debt and the sellers get the cash... Trying to do a 50% cash, 50% share deal, (where the shares hold the debt that generated the cash) is asking eBay's shareholders to be paid with cash borrowed from themselves!

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

#224

Post by duxup »

avonmach wrote: post #46

Seems like a no brainer for people who want to go into a physical store without dealing with the hassle of waiting for the item to sell along with packaging and shipping.

How would that even work? You can only keep so physical items in a store, plus all the costs of a store ...

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

#226

Post by duxup »

Topgamer7 wrote: post #198

The eBay AstroTurf in this thread is real. eBay is a hot piece of garbage, just go watch testimonials of sellers getting ripped off with no recourse. That being said I don't really care whether either end of the sale goes through.

What makes it astroturf? You not liking what people said?

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

#227

Post by Scoundreller »

boldlybold wrote: post #91
TravisJamison wrote: post #43

Earlier quoted context omitted.

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

I frequently buy project car stuff on Ebay. You can find OE stuff with the part numbers scratched off that must have "fallen off the assembly line" pretty easily. Easily a few items per month between that and computer parts!

> OE stuff with the part numbers scratched off

I’ve gotten those off rockauto.

Impossible to say if they’re seconds or the OE just has 1 mould and finds it easier to sand off the excess logo weight.

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

#228

Post by Scoundreller »

rtkwe wrote: post #194
xp84 wrote: post #183

Earlier quoted context omitted.

That's what those huge ~10% final value fees they charge are for. And other revenue such as sponsored listings (pay to boost your item in search results). As long as they keep the fraud volume below like 5% of sales, I feel like it's just a numbers game, where they just need to get as much sales onto their platform as possible to give them enough operating margin to cover their costs (including fraud) and provide pro…

Yeah my main point was it's a complete pain in the ass to deal with if you want to do it properly in a way that actually prevents fraud on either side. eBay has kind of just erred one side or the other for most of it's existence and right now the complaints are mostly from the seller side that I see.

I guess that’s why the Amazon model works: if you warehouse and deliver, then you cut out a lot of the fraud.

Sellers gotta deliver one way or another anyway so building out that logistics doesn’t add much friction to the whole process at scale. If things turnover quickly enough, the first mile benefits exceed the warehousing expense.

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

#229

Post by slumberlust »

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 got scammed on a $25 item in 2003 and never went back.

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

#230

Post by Scoundreller »

stephen_g wrote: post #222
Scoundreller wrote: post #18

Earlier quoted context omitted.

Tbh, if you can convince someone to take your relatively worthless pieces of paper in exchange for your valuable asset, then your worthless pieces of paper are no longer worthless. Not much different than me having a bit of cash and putting 5% or 20% down to buy a home or car: now I’m a big asset and debt holder and you got some pieces of paper with dead presidents on it. That was the hard part of the deal: will (eno…

> That was the hard part of the deal: will (enough) eBay shareholders want to be GameStop shareholders. There is no upside for eBay shareholders - a leveraged buyout makes sense if it's for 100% cash, because the buyers are taking the risk and the debt, and the sellers get the cash. But in this deal, Gamestop need to borrow the money to pay 50% to eBay's shareholders, but then the other 50% eBay's shareholders get is…

eBay does pay out a tiny dividend… would be better for everyone’s taxes if they did buybacks with it…

If they leveraged up a bit more for even more buybacks, they wouldn’t be the first to do so.

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