It's newly issued stock, a common form of making acquisitions cheaper
Lionga 8 minutes ago [-]
Have your ever heard of debt? They have a 20B line secured from TD.
orlp 6 minutes ago [-]
Yes, that goes into the '50% cash' part of the offer. With a 20B credit line and 7.5B cash from their own coffers (which they claim to have, so let's believe them on their word there), you cover the cash portion.
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.
Vespasian 49 seconds ago [-]
Are they under any obligation to ground the value of their own stock or can a salesman simply claim that the "true" value of that stock is much much more than it currently seems to be?
Lionga 2 minutes ago [-]
You understand that the gamestop stock would then be owning ebay, thus be worth Ebay + Gamestops Valuation?
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 21 minutes ago [-]
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.
lesuorac 12 minutes ago [-]
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.
maz1b 2 minutes ago [-]
Not a headline I ever thought I would see. Kinda crazy how meme stocks and retail hype has led to this.
moomin 4 minutes ago [-]
Very specific corners of the internet are losing their minds right now.
TrackerFF 3 minutes ago [-]
So they want to pay half of that with a meme stock?
jofzar 12 minutes ago [-]
I was seeing the news about this calling it GameStop eBay takeover and I assumed it was eBay buying GameStop and I was like, huh that doesn't really make sense for eBay to buy GameStop but maybe they want the physical locations?
How the hell can GameStop buy eBay, this is insane.
vasco 22 minutes ago [-]
The Gamestop CEO is an interesting character, he grew Chewy and sold it, did a massive play on Apple stock during the pandemic and used that to buy a 9% stake in Gamestop over time, rode the hype to accumulate $9B while turning the company around and closing stores that weren't profitable and making it a money making budiness again. And now they already own 5% of eBay on top.
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.
dcminter 14 seconds ago [-]
[delayed]
Eldt 10 minutes ago [-]
He's a meme trader manipulating retailer investors, following Elon's footsteps
memaw12341234 2 minutes ago [-]
those guys have a very strong track record of getting their way lately
Rekindle8090 18 minutes ago [-]
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robotswantdata 20 minutes ago [-]
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Rendered at 10:24:29 GMT+0000 (Coordinated Universal Time) with Vercel.
> 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.
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.
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.
Otherwise take out a $20b loan and put it in the bank. Assets increase $20b, job done.
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.
How the hell can GameStop buy eBay, this is insane.
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.