Along the way he says some ridiculous Trump stuff and wasted a bunch of time on NFTs but the eBay play seems interesting at least. It's one of the best internet soap operas to follow. For comparison AMC was put in the same "meme stock" bag at the time and you can see how they managed to ride the hype. So it's not just memes.
> 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 cash to sweeten the deal. GameStop would issue shares which would capture the original eBay value (since GameStop would own eBay after the trade), making that part a wash. At least assuming people owning eBay stock currently would value the combined company at at least the sum of their parts, which is a big if.
The issue is the non-cash portion of the offer. They claim that the remaining 27.5B is covered by GameStop stock. But that's more than double the market cap of GameStop.
If you word it like this it's just a hostile proposed change of leadership. Weird way to apply to become CEO of eBay, but sure.
The shareholders have to vote for it, though.
Also, eBay shareholders can vote down the acquisition if they don't think the deal is good for them.
The whole thing seems incredibly dubious and fishy. The eBay board should vote this down which is why the CEO of GME has already realised that and said he’ll appeal to the shareholders directly. If eBay wanted to load themselves with twenty billion dollars of unnecessary debt and extra complications which would kill the company then they could do it themselves. They’re not in that kind of business.
Imagine yourself a typical CEO at the center of this hurricane force money windfall driven by internet memes. What else could you other ride all the way to your bank account using the most dubious financial shenanigans known to man?
When the merger concludes, GameStop-eBay will issue the former shareholders of eBay $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...
How the hell can GameStop buy eBay, this is insane.
Here local eBay "clones" aren't in a good place and have been left as ghost towns after Facebook Marketplace.
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 impossible?
Are you new here?
> It is implicit in many comments.
> It is implied in many comments.
I don't see how such leveraged acquisitions should be legal.
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.
Before I started paying attention to such things I wouldn't have known a single one of those terms to even begin googling.
And let's be honest here. A smaller company saddled with big debt buying out an even larger company really doesn't make logical sense. It makes financial sense, which is subject to different laws of mathematics, probably involving the waiter's check pad in an Italian bistro.
GameStop has physical stores so could be a place to send, collect from or even verify high value eBay items.
pjc50•1h ago
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.
hdgvhicv•1h ago
Otherwise take out a $20b loan and put it in the bank. Assets increase $20b, job done.
lesuorac•1h ago
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.
repelsteeltje•52m ago
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.
falcor84•21m ago
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.
wongarsu•50m ago
The most beneficial thing is how even proposing this shifts peoples' perception of Gamestop from a beloved but struggling brick and mortar chain to a successful business
cyanydeez•33m ago
mapt•29m ago
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.
cyanydeez•25m ago
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.
alchemist1e9•3m ago
How is this defined?
OtherShrezzing•32m ago
GameStop had revenues of $3bn last year and eBay was $10-12bn, so combined it's $13-15bn. A net income increase of 1.2bn on that gross is a tall order for M&A efficiencies. Especially difficult when the two companies have essentially zero operational crossover, besides business admin. It doesn't seem likely to me that merging eBay's accounting/legal departments into GME's (and similar efficiency gains) is going to save anything close to a billion across the two entities.