Comment by applfanboysbgon
2 days ago
> GameStop, which had a market value of around $11 billion [...] EBay is several times GameStop’s size, with a market value around $45 billion as of Friday’s close.
> Details of the potential offer for eBay couldn’t be learned.
This appears to be an attention stunt, of which Cohen has done a few since GME became a meme stock.
I’ve searched the net to find the example, but I remember this happening during the dot com era too…
Some unknown tiny company made an offer to takeover Yahoo (or some similar company)… the tiny company made headlines for a moment then disappeared again.
It was an example of dot com silliness.
Can’t for the life of me remember, and Google can’t seem to either.
Similar to when koenigsegg attempted to purchase saab, it can be a great way to get publicity.
> saab
I really loved my 9-3 turbo...
The attention stunts were a strategy toward finding profitability for the core GME business model.
This is significantly different, in line with a strategy that seems to have been in place since he became CEO of Gamestop.
This appears to be an attempt to take over eBay the same way he took over Gamestop by acquiring a 51% controlling interest with capital he will raise by further diluting the value of Gamestop shares.
It appears long term he is trying to build the, "Amazon of the secondhand market".
I remember showing up to buy a new Call of Duty game on release day, back when physical was the only way to buy games and seeing tons of people with boxes full of old games and consoles. I realized then that GameStop's differentiation from other retailers was that it was also a kind of pawn shop.
Maybe but we have a recent sample of Paramount ($12b) acquiring WB ($62b).
That would be more accurately described as Larry Ellison (~$200b) acquiring WB.
Who gave it in writing that he can back the deal if need be.
In that case though Paramount offloaded 25% to foreign wealth funds and had Larry Ellison willing to provide guarantee on(according to google) almost $50b of debt.
Ryan Cohen is rich but he's not that rich.
I believe it was this time last year Ryan had a sit down with the Qatari sovereign wealth fund.
KMart famously aquired the much larger Sears (and then destroyed it)
Same for McDonnell-Douglas and Boeing.
Well, that, and the CEO of Sears was an Ayn Rand fan who decided departments needed to fight each other over everything.
Besides the Larry Ellison, Trump, and Middle East backing, Paramount and WB's businesses have synergy.
Gamestop and eBay have no synergy. Gamestop can't possibly run eBay better than eBay's current management. It's a meme stock looking to make noise so they can get a higher stock price, and then unload their shares onto the public market to raise cash.
GME has 3x'ed their shares outstanding since Covid.
https://www.macrotrends.net/stocks/charts/GME/gamestop/share...
They have deep synergies in the collectibles market. There's a Venn diagram with eBay on one side and Gamestop on the other, and cultural characters like Logan Paul with his $16m Pokemon card right in the intersection.
This is a big market getting bigger. Americans have more spending money than ever before, especially at the top end, and the collectibles market is expected to grow as much as 7% y/y for a long time. That's like $50b of new spend every year. Massive opportunity.
I think this is smart. Gamestop is a vibes company, everyone knows it, and this is an opportunity to acquire a real business with strong tailwinds. Everyone knows eBay has been poorly run for 20 years. Even in 2010/2011 when I worked there it was running on empty so to speak. Some opportunity to take control of that narrative and grow the business in demographics with deep pockets would be huge.
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If they promised to revert eBay's search to how it worked in 1997 I'd throw them a few dollars to bolster their "takeover."
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I could see a synergy. Remember when there was a small trend of strip-mall "We'll sell on eBay for you" shops?
That seemed like a great idea for certain types of goods-- the market for plenty of collectibles are thin in any given locality, but it was always clumsy to get to the global marketplace. If you had a normal consumer eBay account with 30 feedback, you might have a hard time getting trust against sellers with 400,000. You had to deal with packing, shipping, nonpayment, complaints.
Handing it all off to a professional with experience and a high volume credible account was worth a consignment commission. But they seemed to dry up after a while, I think when eBay pivoted from "the world's garage sale" to "AliExpress but some products are in domestic warehouses."
If you had a widely deployed retail presence that was already used to dealing with used merchandise (pawnshop-style laws, routing items for cleaning/refubrishment etc), turning the tradein counter into a consignment counter is a potential win. New revenue stream, gets people in the door, and provides an expectation of legitimacy and predictability.
Yeah I don’t blame them. They didn’t create the meme but once it happened, any responsible leader would start doing secondary offerings to raise money. I sure would. If morons want to keep investing in the stock of a company that has no other chance of survival, great. Now they’ve got $9 billion on hand and they’ve had time to find a niche, right-size, and the interest on the cash pile is great too.
> Gamestop can't possibly run eBay better than eBay's current management.
I meaaaaaaan...
https://en.wikipedia.org/wiki/EBay_stalking_scandal
"Deferred Prosecution Agreement with District of Massachusetts" still sits in the eBay footer. ;)
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To be clear, if GameStop has no intent or ability to do the things they’re saying they’re going to do, as a public company in respect of another, that’s all kinds of securities fraud and shareholder-lawsuit catnip.
Put another way, if you think this is fake you could make a lot of money. Because that would mean GameStop is de facto offering the market a free put on its own and eBay’s stock.
This probably would have been investigated in the 2010s. Since covid, security fraud seems to be rampant.
Gamestop is just in the business of selling their shares to retail. It's pretty much like a crypto shitcoin.
Not necessarily a stunt if they’ve taken a meaningful stake. Smaller companies can acquire larger ones. Market cap reflects equity, not enterprise value. If the target has low debt, the deal can be financed with borrowing. The 1980s LBO wave, led by Michael Milken, is a clear precedent.
However GameStop does have like $9 billion in cash on hand if I recall correctly.
> an attention stunt, of which Cohen has done a few since GME became a meme stock
What would be these few attention stunts he did?
NFT’s and crypto nonsense, for starters. Go look him up and what he has done at GameStop. He’s not exactly shy about his plans and likes to make dramatic statements.
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