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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

#461

Post by turtlesdown11 »

maxk42 wrote: post #423
turtlesdown11 wrote: post #349

Earlier quoted context omitted.

> Who would down vote this? It’s true. It's not an answer to the question of a turnaround, and therefore low quality information? How much you have in assets does not correlate with the ongoing success of the business. Examining the day to day business of Gamestop and excluding the memestock shenanigans leaves a very bad business. The core business has declining revenue - net sales 2016 $8.6b, 2025 $3.5b and still in…

I guess you missed the part where they turned around and became profitable.

Perhaps a simple analogy would work here - you made $86,000 in 2016, and had a $6,000 surplus that represents your profit. In 2020 you made $50,000 and spent $5,0000 of your savings to stay afloat. You shrink your lifestyle. Now in 2025, you make $35,000 a year, and have a $2,000 surplus. There are no prospects for more income and you expect to earn $32,500 next year, and maybe $30,000 the year after. Would you consider this a turnaround for your finances?

Likewise, the company's revenue has declined ~60% in the last ten years, and declined 5% from 2024 to 2025. The business became marginally profitable when they shrank the business by reducing operating expenses and produced a small profit.

There are no significant avenues for growth in their current business model, revenue will continue to decline, as it has for the last ten years because the core model of re-selling used games continues to shrink. As revenue decline continues, they'll run out of people to lay off and stores to close, there will be no profit because the revenue is too small, and the company will BK.

There is no turn around, the company continues a death spiral.

Re: GameStop makes $55.5B takeover offer for eBay

#462

Post by WorldMaker »

taeric wrote: post #329
HillRat wrote: post #308

Earlier quoted context omitted.

Say you take out a mortgage, then rent the house to a series of meth dealers to extract the rent while devaluing the property, and then default: you're still personally on the hook for any post-foreclosure deficiency judgment. One issue with LBOs is that, after extracting cash and fees, PE funds have various ways to extinguish liabilities that individuals don't, both by shielding the PE fund from debts and the use of…

I mean, if I'm allowed to just make up silly hypotheticals, I can easily justify anything. Say I raise money for a friend to buy a house and they proceed to rent it out to meth dealers. The friend is the one on the hook for the loans, of course; but would I not be on the hook for at least a reputation hit such that I can't do that again? Or do we think folks can get away with that sort of poor judgement forever?

In that sort of hypothetical the Mortgage bank is likely to take one look at your friend, see you with all the money for the down payment, and decide that you need to at least cosign the loan (if not be solely responsible). You would be on the hook for the reputation (and credit score) hit and certainly still paying off the rest of the loan or face foreclosure and possibly a criminal lawsuit for fraud.

Which yeah, leaves a lot of questions for why this is legal for an LBO. Where's the "credit score" hit on these PE firms doing LBOs? How is it that these investors are allowed to be their own mortgage bank, not require themselves to cosign the very loan they are providing the down payment equity for, and not be liable for damages such as bankruptcy of the entity they put on the hook for the loan?

Re: GameStop makes $55.5B takeover offer for eBay

#463

Post by WorldMaker »

TSiege wrote: post #315
taeric wrote: post #303

Earlier quoted context omitted.

There is a long practice of having cosigners on home loans. This feels basically like that. Which, granted, if you don't like the idea of establishing a company to take on loan responsibilities, I am not trying to offer a defense of that. Was a legit question of how you would structure it so that this is illegal, but home/auto loans are not.

A cosigner is different than what's happening in leveraged buy outs. A Cosigner is financially responsible if the debtor cannot pay back their portion of the loan. In a Leveraged buyout the purchaser does not take on financial liability for the debt, that is all placed on the company being purchased. This means that if the purchaser isn't even the cosigner in this scenario; the company being purchased is the sole ent…

But the biggest reason the purchaser does not have to cosign that loan is because in an LBO the purchaser is also essentially the mortgage bank for that loan. Should that be allowed?

Re: GameStop makes $55.5B takeover offer for eBay

#464

Post by idiotsecant »

reddalo wrote: post #213
idiotsecant wrote: post #167

Earlier quoted context omitted.

Why does it need a rewrite if it works great?

Because it works great as a platform, and because I've been using it for 20 years. But for a new user, it looks completely messy, with pages that are vastly different from each other and many sections that look exactly as they were in the early 2000's.

I'm not sure 'it looks like it did in 2000' is worth tearing it all down, starting over, and introducing new bugs. Sometimes things just work. Ebay is very functional for a huge amount of commerce. It loads reasonably quickly and is reasonably easy to navigate.

Re: GameStop makes $55.5B takeover offer for eBay

#465

Post by WorldMaker »

iot_devs wrote: post #379
elzbardico wrote: post #351

Earlier quoted context omitted.

In a home loan, the borrower buys a house and pledges that house as collateral. The debt is the buyer’s obligation. The house does not have to “pay the mortgage” by laying off the kitchen, selling the roof, or cutting maintenance. The borrower uses outside income to service the debt. In an LBO, a private equity buyer often buys a company using a large amount of debt, but the debt is typically placed on the acquired c…

Something that I never quite understood is who lend the money for this sort of activities? The lender knows how risky they are.

Technically the lender is the purchaser in the LBO which is also why this is so much the purchased company having to pay for its own purchase. Which seems to me like the easiest part to regulate: require third party lenders who can also audit the details of the loan terms and fees.

Re: GameStop makes $55.5B takeover offer for eBay

#466

Post by turtlesdown11 »

antasvara wrote: post #457
dgellow wrote: post #258

Earlier quoted context omitted.

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…

> GameStop already has this network of pawn shops, and those stores are doing enough business to justify their existence

Gamestop closed 2,400 stores from 2020 to present, and operates just 2,200 stores currently. They'll continue to close stores as their revenue continues to shrink (down 60% in the last decade).

>used gaming inventory

physical used game inventory is a fraction of what it was a decade ago, and continues to shrink as a category, digital sales continue to climb and exclude Gamestop

Re: GameStop makes $55.5B takeover offer for eBay

#467

Post by seizethecheese »

fasteo wrote: post #228
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.

>>> should-be-illegal process of putting debt on the acquired company's balance sheet This is a basically a leveraged buyout (LBO). All private equity works this way. Yes, it should be illegal, or at least heavily limited. I highly recommend this book: "Plunder: Private Equity’s Plan to Pillage America"

I was curious about this, so I searched for the most authoritative study on private equity. Here’s what I got: https://journals.aom.org/doi/10.5465/AMBPP.2021.14309abstrac...

This says that private equity effect on employment is neutral and efficiency is positive.

So what gives?

Re: GameStop makes $55.5B takeover offer for eBay

#468

Post by WorldMaker »

happyopossum wrote: post #286
bhouston wrote: post #221

Earlier quoted context omitted.

> My kneejerk is that most consumers these days expect delivery for items purchased online 100%. > Now, dropping off items you're selling? This is what Staples is offering to Amazon but for returns - quite similar. And they could offer them to eBay as well I am sure. You do not need your own chain of brick and mortar stores to do this and I am sure the cost per drop off would be cheaper with Staples than your own cha…

> This is what Staples is offering to Amazon but for returns Yes, and usps stores and Whole Foods do that for Amazon in the US as well. The difference is that each of those items don’t need to be individually packaged and shipped to unique locations. My local USPS put all the returns for the day in a giant bin and an Amazon driver picks them up. I think the cost of labor and liability involved in having a local retai…

Kohl's also has a returns arrangement with Amazon.

Re: GameStop makes $55.5B takeover offer for eBay

#469

Post by fhn »

FireBeyond wrote: post #424
BizarroLand wrote: post #400

Earlier quoted context omitted.

eBay has also started doing strongarm middleman things as well. If you list an item, it strongly "suggests" a price. Sounds innocuous, right? However, when every seller knows they would be stupid to list a product for less than the suggested price, that means that eBay is enacting a collusion process on their sellers to regulate prices for products sold on their platform. I don't think this is illegal in any way, but…

Yeah, I got fucked over by eBay and will never sell on there again. eBay let someone scam me out of $700. I sold a Mavic 2 Pro drone with 5 batteries. The whole process was a mess. Scammer initially complained that it didn't come with a CrystalSky tablet that was in one picture (that was only added AFTER after he had bid already and asked to see Flight Logs, and was explicitly disclaimed as not being a part of the pa…

Yea, buy on ebay either. It's all a scam now.

Re: GameStop makes $55.5B takeover offer for eBay

#470

Post by asynchronous13 »

rahimnathwani wrote: post #297
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 think it made about a billion dollars in profit" It raised over a billion dollars of capital (i.e. issued shares in return for cash). It did not make a billion dollars in profit (and has never had a year when it did).

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
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