GameStop makes $55.5B takeover offer for eBay

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.

There is no way that this deal will go through. However, it is good publicity stunt! Their offer is only 20% above the current share price, and they don't have nearly enough funding to complete the transaction. I would love to know what rate TD Securities is willing to lend? What would be the spread over 3month USD LIBOR? I assume 300-500 bps.

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 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.

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 impossible?

I believe ebay should put itself up for sale on ebay instead.

2021: a Reddit short squeeze kept GameStop from going under. 2026: GameStop is bidding $55B for eBay, a company 4x its size. If it lands, this might be the strangest full circle moment public markets have ever produced.

GameStop is not a serious company and it is baffling seeing how many people here buy into their hype nonsense.

Very specific corners of the internet are losing their minds right now.

I was just thinking how nice it was to still get used stuff on eBay and now Mr. McMemeStock is going to kill it to extract a few billion for himself.

Yay.

The offer letter: https://www.sec.gov/Archives/edgar/data/1326380/000119312526...

Is this going to turn Gamestop stores into something like those "sell it on Ebay" stores?

Wonder what Shkreli thinks of this.

GameStop is going to acquire BestBuy

Not a headline I ever thought I would see. Kinda crazy how meme stocks and retail hype has led to this.

Most business nowadays is related to financial transactions instead of building new products or services

The real economy seems to be burning but Wallstreet acts as if it didn't matter.

Previous discussion: "GameStop Preparing Offer for eBay" https://news.ycombinator.com/item?id=47985271 68 comments

I guess if people use eBay a lot to sell used games then there is something of an overlap there. Otherwise, it seems pretty weird.

With the state ebay is in, I'd welcome anyone else to run it

So they want to pay half of that with a meme stock?

If they can do some accounting trickery to pull this off then they deserve it. Makes zero sense to me but I did not think GameStop had even close to that in assets.

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.

Famous grifter Ryan Cohen is back in business. Time to collect more money from reddit

Every day our world is becoming just that tiny little bit more stupid

"I like the stock" - GameStop

Diamond hands?

From storytelling to investor POV, does it a good story to frame this as entering the AI era through a digital service that everyone familiar with?

Are there still large shorts on GameStop? If this goes through I assume it will wipe those out?

Can we please not? eBay is one of the few places I still enjoy on the web.

i don't understand why ebay looks SO terrible. It seems like some broken website where css failed to load.

Reminds me of Sierra On-Line being acquired by CUCk International in 1996.

is this for real? Or just to get gamestonks back into the news for another whirl on the wheel of meme?

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.

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ebay is still "old internet", and genuinely useful and well built. enshittification is incoming...