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.

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.

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

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

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

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

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?

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

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

"I like the stock" - GameStop

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.

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?

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

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.

[dead]