alt Hacker NewsTaking a $20b loan from TD Bank + sitting on $9b CASH + GameStop stock for the rest. They’ve made an interesting proposal around using 1600 GameStop locations for fulfilment. Smart if they can make it work.
Update: Numbers still don’t add to $55b - I think there’s a $14b shortfall. Not sure about how they are planning to fund that.
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A company doesn't need $55bn to buy a $55bn company. They can issue new GME shares and exchange $EBAY for $GME. These are sometimes called "stock-for-stock" transactions
GameStop has a standing approved agreement to issue up to a billion new shares. If you read the offer you will see it is 50% financed by GameStop stock.
They threw him a hardball today in his cnbc interview on this topic. $GME stock value would plummet short term, but the combined company would revalue much higher.
Current Gamestop shareholders would be diluted. They would own, proportionally, a much small slice of the combined company, but at a higher price point.
The framing of this as, "Ryan Cohen is diluting Gamestop shareholders in order to meet the terms of his enormous pay package" is disingenuous though, as his pay package is all stock. He's diluting himself too. He obviously has faith that, long term, the value of the combined company can substantially grow.
> They’ve made an interesting proposal around using 1600 GameStop locations for fulfilment.
Is that really an advantage? Fulfilment is always handled by a lot of places for the big e-retailers for returns, which is similar to what eBay needs for sellers.
How much does Staples charge for its Amazon return fulfillment where you don't even need to wrap up the item?
It is really popular: https://www.staples.ca/a/learn/amazon-returns-now-available-...
I question whether it is advantageous to use GameStop stores for this or just to piggy back on what Staples is already offering to Amazon and others for their returns? Fulfilling returns for Amazon isn't significantly different to shipping eBay orders.