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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

#61

Post by sigmoid10 »

ceejayoz wrote: post #15
orlp wrote: post #7

GameStop doesn't have (even close to) $55.5B. Their offer from the letter is literally impossible: > Our offer is $125.00 per share, comprising 50% cash and 50% GameStop common stock Even if you magically included all existing GameStop stock in the offer, it still would not comprise 50% of $55.5B. EDIT: looks like it's not impossible and I misunderstood. It's a proposed change of leadership with a $25B injection of c…

Isn’t that just a https://en.wikipedia.org/wiki/Leveraged_buyout ?

That's just for the cash part. The stock part makes no sense. For this 50/50 deal to work in principle, they'd need to issue around a billion new shares, which would massively dilute the existing ~450M shares. So Ebay shareholders would suddenly own 70% of Gamestop after the deal. It's also highly questionable if investors actually believe the combined stock is worth that much, so the stock price would probably fall and turn those 70% into >90%. At this point it basically becomes a reverse acquisition plus a large loan for the final company from the cash part of the deal.

Re: GameStop makes $55.5B takeover offer for eBay

#62

Post by cyanydeez »

mapt wrote: post #56
cyanydeez wrote: post #46

Earlier quoted context omitted.

the only benefit I can see is some kind of eBay pick up and verification scheme where sellers use the gamestop locations to send their products and buyers go theere to pick it up. That would basically create a "this is garbage feedback" that could cleanup some of ebay's long standing problems in trust.

While this seems like the perfect synergy with a company that has too many branches and not enough business, those branches are also tiny. I'd bet employees are not enthusiastic about becoming UPS. Becoming Radio Shack / Microcenter, as far as 3D Printing and DIY electronics, seems like it intersects with their target audience more, but they're also probably pretty short on space for that.

yeah, their shops arnt sized to do much more than UPS style package movement.

I dont see it as a good value, but it's the only thing I see as a synergy. Otherwise it's just more garbage capitalism.

Re: GameStop makes $55.5B takeover offer for eBay

#63

Post by bilekas »

gizajob wrote: post #48
orlp wrote: post #7

GameStop doesn't have (even close to) $55.5B. Their offer from the letter is literally impossible: > Our offer is $125.00 per share, comprising 50% cash and 50% GameStop common stock Even if you magically included all existing GameStop stock in the offer, it still would not comprise 50% of $55.5B. EDIT: looks like it's not impossible and I misunderstood. It's a proposed change of leadership with a $25B injection of c…

I don’t understand why eBay shareholders will suddenly want GME memestock and find any interest in voting for this.

I don’t understand either but wouldn’t they still be owning eBay? Just with GME?

Re: GameStop makes $55.5B takeover offer for eBay

#64

Post by [deleted] »

wongarsu wrote: post #32
airstrike wrote: post #10

Earlier quoted context omitted.

It's newly issued stock, a common form of making acquisitions cheaper

How is a 20bn company going to issue 27bn worth of stock? Or are they just going to pretend the newly issued shares are valued the same per share as existing stock is right now?

[deleted]

Re: GameStop makes $55.5B takeover offer for eBay

#66

Post by falcor84 »

repelsteeltje wrote: post #26
lesuorac wrote: post #9

Earlier quoted context omitted.

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.

> Well, his argument is that he can remove inefficiencies in the combined company. Sigh. The synergy argument, once again. While historically most mergers don't work out particularly well, I'm absolutely sure this time will be different.

"How do you make money? Spinoffs, split-ups, liquidations, mergers and acquisitions." - Mario Gabelli

Just sample from these with replacement sufficiently many times and you're all set. At the very least, you'll owe people so much money that they'll have a massive interest in helping you.

Re: GameStop makes $55.5B takeover offer for eBay

#67

Post by JumpCrisscross »

orlp wrote: post #7

GameStop doesn't have (even close to) $55.5B. Their offer from the letter is literally impossible: > Our offer is $125.00 per share, comprising 50% cash and 50% GameStop common stock Even if you magically included all existing GameStop stock in the offer, it still would not comprise 50% of $55.5B. EDIT: looks like it's not impossible and I misunderstood. It's a proposed change of leadership with a $25B injection of c…

> GameStop doesn't have (even close to) $55.5B

When the merger concludes, the former shareholders of eBay will have $27.5bn of GameStop-eBay stock and $27.5bn of cash. (“Cohen said GameStop has a commitment letter from TD Bank to provide up to $20 billion in debt financing” and “GameStop has around $9 billion in cash on its balance sheet to put toward a deal” [1].)

[1] https://www.wsj.com/business/deals/gamestop-is-offering-to-b...

Re: GameStop makes $55.5B takeover offer for eBay

#68

Post by Hackbraten »

manwithnoplan wrote: post #25

A lot of the comments here seem to assume that a smaller public company can’t acquire a larger one, which just isn’t true. A quick search for how leveraged acquisitions, stock-for-stock deals, financing commitments, or tender offers work would answer most of the objections. Is it too much to ask the Hacker News commentariat to do one quick search before collectively declaring that something they don’t understand is i…

> A quick search for how leveraged acquisitions, stock-for-stock deals, financing commitments, or tender offers work would answer most of the objections.

Isn’t the assumption that it’s impossible intuitively justified if you have no background in finances? A small fish usually can’t devour a bigger fish either.

Also, all those terms you mentioned mean nothing to me. You can’t search for what you don’t know exists.

Re: GameStop makes $55.5B takeover offer for eBay

#69

Post by manwithnoplan »

wwalexander wrote: post #54
manwithnoplan wrote: post #36

Earlier quoted context omitted.

It is implicitly implied in many comments.

“Implicitly implied” is redundant. Either of these phrasings would suffice: > It is implicit in many comments. > It is implied in many comments.

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