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There is, literally, nothing fishy about this offer. It’s a cash and stock offer from a public company to public company shareholders. We could call the financi
by vessenes 6mo ago
There is, literally, nothing fishy about this offer. It’s a cash and stock offer from a public company to public company shareholders. We could call the financial or shareholder benefits to ebay dubious (I don’t hold any opinion about this) but this is a very aggressive offer, and allows the chance for GME to keep some cash - if enough shareholders of ebay opt for stock, then they’ll have cash available after. Plus they’d keep whatever current net assets ebay has.
ebay was at like 100 before the offer went out, it’s trading up to 120 or so in early hours this morning, so speculators and institutional desks do not find this offer fishy or dubious - they are pricing it as likely to be pretty well received.
As a side note, one of many plays you might make in this situation is what Cohen has done here; they bought a bunch of options. Those options are now worth a lot; before the letter if it was all options, they controlled $2b of EBAY shares, today that’s $2.6b. We might imagine the options at least doubled the underlying return. The market had not priced in a rapid jump to $120 when he bought them. If the deal closes, then this will put at least another billion or two of liquid capital into GME.
- gizajob 6mo agoThe end of your post negates the first line of it.
- jfengel 6mo agoTD Bank also believes it will work, i.e. return them a profit. They've seen the detailed plans and I haven't. But they're the ones with real skin in the game. It seems like an opportunity for them to lose their shirts. So yeah, eBay shareholders should take TD Bank's free money and run.
- gizajob 6mo agoOr ignore the free money/destroy company offer and hold.
- acdha 6mo agoTD Bank believes it will make them a profit. Their interests are not those of eBay’s shareholders: if they can juice the financials long enough to sell their loan, they don’t care if the company goes bankrupt the minute after that sale closes.
- gorbachev 6mo agoTD Bank is the perfect lender for this. https://www.fincen.gov/news/news-releases/fincen-assesses-record-13-billion-penalty-against-td-bank https://www.fincen.gov/news/news-releases/fincen-assesses-re...