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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

#451

Post by nyeah »

shmatt wrote: post #270
getnormality wrote: post #212

Earlier quoted context omitted.

> the should-be-illegal process of putting debt on the acquired company's balance sheet. I agree it's weird but ultimately the check against dumb lending is natural consequences for the lender, right? If you ask me for billions in loans for your zero revenue company and I give it to you, whose problem is that but my own?

The lenders get their money back via management fees. Pretty much only the consumers and the employees get screwed over

For the most part, the lenders are not the people receiving management fees.

Re: GameStop makes $55.5B takeover offer for eBay

#452

Post by SwellJoe »

digitaltrees wrote: post #447
crazygringo wrote: post #370

Earlier quoted context omitted.

> GameStop is setup as a legal pawnshop in every state. So a pawnshop buying out eBay makes insane sense. It doesn't though. eBay could easily set itself up as a legal pawnshop in every state if it wanted to. It doesn't because there's no advantage to doing so. There are already third-party sellers in many areas who will take your physical merchandise and sell it on eBay in exchange for a cut. eBay doesn't need to en…

But the brick and mortar distribution is hard to build and gives a structural advantage. As another poster pointed out, you could sell your items locally and not need to deal with shipping, communication with buyers and other stuff. It would reduce friction which might actually expand the marketplace significantly. I personally have multiple family members that throw stuff away because listing on eBay is too hard and…

Why does it give structural advantage to own a bunch of dead mall and strip mall brick and mortar stores that have been on the verge of bankruptcy for well over a decade?

Re: GameStop makes $55.5B takeover offer for eBay

#454

Post by nyeah »

SpicyLemonZest wrote: post #232
getnormality wrote: post #212

Earlier quoted context omitted.

> the should-be-illegal process of putting debt on the acquired company's balance sheet. I agree it's weird but ultimately the check against dumb lending is natural consequences for the lender, right? If you ask me for billions in loans for your zero revenue company and I give it to you, whose problem is that but my own?

The problem is that leveraged buyouts allow me to effectively inflict that debt on other companies, making a buyout offer the existing shareholders won't be able to resist and then reorienting its operations around servicing the debt I took out. In fact, lenders arguably favor this, letting me use the company I'm acquiring as collateral to acquire more debt at better terms than would otherwise be available.

Of course lenders will lend more against more collateral. That doesn't mean it always ends happily.

Re: GameStop makes $55.5B takeover offer for eBay

#455

Post by zargon »

ryandrake wrote: post #319
dingaling wrote: post #304

Earlier quoted context omitted.

> Maybe eBay survives as an international site I don't really know what alternative there is to eBay as an 'everything shop'. I can get specific screws there, or diff fluid, or a customised motorhome name sticker, or an old baseball cap for an airshow I attended in 2008. And if I bought the wrong diff fluid I can sell it. The main value over Amazon, though, is that the search works.

> The main value over Amazon, though, is that the search works. Super true. You can actually search for the exact brand you want and not get a search result page full of brands XIAOLE, LLKAPOO, JEMROK, QPPNSS, VRINHH. Also, I don't really know why, but I have much greater confidence on eBay that I'm not going to get something counterfeit or unsafe.

> I have much greater confidence on eBay that I'm not going to get something counterfeit or unsafe.

On eBay, sellers control their inventory, listings, customer service, and resulting reputation end-to-end. On Amazon, the incentives are backwards.

Re: GameStop makes $55.5B takeover offer for eBay

#456

Post by qaq »

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 ...

Re: GameStop makes $55.5B takeover offer for eBay

#457

Post by antasvara »

dgellow wrote: post #258
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…

I thought the point of eBay was to get rid of that middleman. Wouldn’t that be something eBay would have done at some point if they wanted to own a pawnshop? Not saying that cannot work but that doesn’t sound like a genius idea

I think the difference is that GameStop already has this network of pawn shops, and those stores are doing enough business to justify their existence (at least somewhat; GameStop wasn't doing great before all the craziness). I could see something like the UPS kiosk in my local Walmart working; if you offered eBay returns at GameStop stores, you would be adding revenue without needing to justify an entire store to it like eBay would have needed to.

There's also the synergy that GameStop now has access to more used gaming inventory, a category that I'm led to believe is high margin for the stores.

Re: GameStop makes $55.5B takeover offer for eBay

#459

Post by busterarm »

andrewljohnson wrote: post #353
busterarm wrote: post #173

Earlier quoted context omitted.

That’s not correct. eBay owns TCGplayer which has large warehouses and does direct shipping & fulfilment sales (tcgdirect).

eBay already had warehousing ops, I assume larger than tcgplayer’s. Last year, eBay shut down tcgplayer’s only fulfillment facility in Rochester, NY and switched to using eBay’s facility in Kentucky.

That wasn't about size, it was a labor play. The NY workers were negotiating for unionization for 500 days because of unfair conditions and low pay.

I would have projected the same outcome though.

Quality of TCGDirect operations, from an enduser perspective, took a nosedive with the move and never recovered.

Re: GameStop makes $55.5B takeover offer for eBay

#460

Post by SwellJoe »

lesuorac wrote: post #9
hdgvhicv wrote: post #4

Earlier quoted context omitted.

Wouldn’t that debt knock down the market cap as much as the value Otherwise take out a $20b loan and put it in the bank. Assets increase $20b, job done.

Well, his argument is that he can remove inefficiencies in the combined company. GME is ~12B, EBAY is ~46B (58 total) with net income of 0.4B and 2B (2.4 total). If he boosts profit by 1.2B then it's nearly a 50% increase and probably going to result in a more valuable combined company despite the debt.

Which is a laughable argument.
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