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Taking 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 f

Taking 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.

bhouston 6mo ago
> 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-at-staples-canada-retail-stores 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.
- noitpmeder 6mo ago
  My kneejerk is that most consumers these days expect delivery for items purchased online, and allowing them to pick up their items at a brick and mortar probably isn't the issue. Now, dropping off items you're selling? That probably removes a decent hurdle for many first-time/one-time users who aren't familiar with shipping (what box/label/insurance/padding/...).
  - bhouston 6mo ago
    > My kneejerk is that most consumers these days expect delivery for items purchased online 100%. > Now, dropping off items you're selling? This is what Staples is offering to Amazon but for returns - quite similar. And they could offer them to eBay as well I am sure. You do not need your own chain of brick and mortar stores to do this and I am sure the cost per drop off would be cheaper with Staples than your own chain that only serves you. GameStop is a game of constant pivots that sound good to its meme-believers that do not really work in the real-world.
    - happyopossum 6mo ago
      > This is what Staples is offering to Amazon but for returns Yes, and usps stores and Whole Foods do that for Amazon in the US as well. The difference is that each of those items don’t need to be individually packaged and shipped to unique locations. My local USPS put all the returns for the day in a giant bin and an Amazon driver picks them up. I think the cost of labor and liability involved in having a local retail worker wrap, label, and ship every package would be an order of magnitude higher than shipping alone and destroy any value in offering it.
      - bhouston 6mo ago
        Sorry, are you saying that USPS cannot handle shipping across the country cost effectively? But somehow GameStop can, which has never done point-to-point shipping before?
      - WorldMaker 6mo ago
        Kohl's also has a returns arrangement with Amazon.
  - SkyeCA 6mo ago
    > Now, dropping off items you're selling? A place that you could take items and have them packed and shipped for you would remove an enormous hurdle for new eBay sellers. It's easily the most annoying part of the entire process. Hell, maybe they could even list items for people? Like a massive digital pawn shop. I could see this really working out for them if they do it right.
    - c22 6mo ago
      Actual pawn shops already do this, though.
      - altcognito 6mo ago
        Yeah, but now with a brand
  - Pikamander2 6mo ago
    Can confirm. The main reason why I don't sell stuff on eBay more is because of the high shipping costs and frequent scams. Facebook Markerplace has issues of its own, but if you agree to meet up at a safe public location to buy/sell the item in person, then it mostly alleviates those two issues aside from the small chance of receiving counterfeit bills. If Gamestop and eBay merge, then they could (potentially) offer a better deal to buyers/sellers by either buying certain items directly, shipping them at lower costs, or having an employee "verify" the item before it ships so that the seller receives better protections. That's assuming that this is truly an ambitious merger rather than just being some kind of exit liquidity scam that gives Ryan Cohen a golden parachute right before he peaces out.
- colechristensen 6mo ago
  >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. I think the advantage is going to be "bring your junk to GameStop and an employee will put it up for sale and handle shipping" You'd get considerably more trust buying something on ebay that at least some teenager looked at and verified was real and powered on, etc.
weard_beard 6mo ago
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.
- 3form 6mo ago
  >He obviously has faith that, long term, the value of the combined company can substantially grow. Depends how much of them he has before and he will after, it might still be worth diluting if difference is vast. Also, why long term if short term could also do?
  - weard_beard 6mo ago
    My take? The strategy is like a contractor fixing up houses. GameStop was the crappiest house on the block. He’s fixed it up and is using it as collateral to take out a loan and buy the dilapidated mansion next door (eBay). He’ll keep going until he’s gentrified the whole neighborhood using the value of the current business as collateral to buy the next. He wants to sell only when the value of the entire gentrified neighborhood reflects market rate for the work he's put in.
    - this_user 6mo ago
      The only thing that Cohen has done is shut down stores and cut costs massively at the expensive of revenue. He hasn't really fixed anything, he is just managing their demise. All of his strategic initiatives like expansion of e-commerce or an NFT platform were complete disasters that had to be wound down. The only reason the company is even showing a profit is because they repeatedly diluted shareholders to raise cash and then re-invested that money into Treasuries. Basically, if you are buying GME stock, you are getting an expensive fixed income wrapper. Buying EBAY would be a bad deal for pretty much everyone involved. GME shareholders get diluted to buy EBAY for way too much money. EBAY shareholders get paid in vastly overvalued GME shares. And the entire thing would be managed by some guy whose only strategic idea is to cut costs. The only one who would benefit is Cohen, because it would create a sufficiently liquid market for him to sell his stake, something that is not currently possible in GME.
andruby 6mo ago
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
- shmatt 6mo ago
  Except a sudden dilution usually tanks the stock by the exact % its diluting So GME dilutes by 20%, stock price immediately goes down by 20%. its not some infinite money hack
  - sokoloff 6mo ago
    Except in this case, the company also now owns EBay with a market cap of around $44B before the takeover bid was announced. I don’t think GP was claiming it was an infinite money hack at all.
- Panzer04 6mo ago
  Basically a merger.
archon810 6mo ago
Here's the GME CEO attempting to explain the deal https://x.com/i/status/2051303211668021478 https://x.com/i/status/2051303211668021478. And "Attempting" is doing the heavy lifting here.
- cloudfudge 6mo ago
  "Attempting" is not in any way a valid description of what he's doing there. That was a wild clip.

bhouston 6mo ago

> 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-at-staples-canada-retail-stores 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.

noitpmeder 6mo ago
My kneejerk is that most consumers these days expect delivery for items purchased online, and allowing them to pick up their items at a brick and mortar probably isn't the issue. Now, dropping off items you're selling? That probably removes a decent hurdle for many first-time/one-time users who aren't familiar with shipping (what box/label/insurance/padding/...).
- bhouston 6mo ago
  > My kneejerk is that most consumers these days expect delivery for items purchased online 100%. > Now, dropping off items you're selling? This is what Staples is offering to Amazon but for returns - quite similar. And they could offer them to eBay as well I am sure. You do not need your own chain of brick and mortar stores to do this and I am sure the cost per drop off would be cheaper with Staples than your own chain that only serves you. GameStop is a game of constant pivots that sound good to its meme-believers that do not really work in the real-world.
  - happyopossum 6mo ago
    > This is what Staples is offering to Amazon but for returns Yes, and usps stores and Whole Foods do that for Amazon in the US as well. The difference is that each of those items don’t need to be individually packaged and shipped to unique locations. My local USPS put all the returns for the day in a giant bin and an Amazon driver picks them up. I think the cost of labor and liability involved in having a local retail worker wrap, label, and ship every package would be an order of magnitude higher than shipping alone and destroy any value in offering it.
    - bhouston 6mo ago
      Sorry, are you saying that USPS cannot handle shipping across the country cost effectively? But somehow GameStop can, which has never done point-to-point shipping before?
    - WorldMaker 6mo ago
      Kohl's also has a returns arrangement with Amazon.
- SkyeCA 6mo ago
  > Now, dropping off items you're selling? A place that you could take items and have them packed and shipped for you would remove an enormous hurdle for new eBay sellers. It's easily the most annoying part of the entire process. Hell, maybe they could even list items for people? Like a massive digital pawn shop. I could see this really working out for them if they do it right.
  - c22 6mo ago
    Actual pawn shops already do this, though.
    - altcognito 6mo ago
      Yeah, but now with a brand
- Pikamander2 6mo ago
  Can confirm. The main reason why I don't sell stuff on eBay more is because of the high shipping costs and frequent scams. Facebook Markerplace has issues of its own, but if you agree to meet up at a safe public location to buy/sell the item in person, then it mostly alleviates those two issues aside from the small chance of receiving counterfeit bills. If Gamestop and eBay merge, then they could (potentially) offer a better deal to buyers/sellers by either buying certain items directly, shipping them at lower costs, or having an employee "verify" the item before it ships so that the seller receives better protections. That's assuming that this is truly an ambitious merger rather than just being some kind of exit liquidity scam that gives Ryan Cohen a golden parachute right before he peaces out.
colechristensen 6mo ago
>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. I think the advantage is going to be "bring your junk to GameStop and an employee will put it up for sale and handle shipping" You'd get considerably more trust buying something on ebay that at least some teenager looked at and verified was real and powered on, etc.

weard_beard 6mo ago

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.

3form 6mo ago
>He obviously has faith that, long term, the value of the combined company can substantially grow. Depends how much of them he has before and he will after, it might still be worth diluting if difference is vast. Also, why long term if short term could also do?
- weard_beard 6mo ago
  My take? The strategy is like a contractor fixing up houses. GameStop was the crappiest house on the block. He’s fixed it up and is using it as collateral to take out a loan and buy the dilapidated mansion next door (eBay). He’ll keep going until he’s gentrified the whole neighborhood using the value of the current business as collateral to buy the next. He wants to sell only when the value of the entire gentrified neighborhood reflects market rate for the work he's put in.
  - this_user 6mo ago
    The only thing that Cohen has done is shut down stores and cut costs massively at the expensive of revenue. He hasn't really fixed anything, he is just managing their demise. All of his strategic initiatives like expansion of e-commerce or an NFT platform were complete disasters that had to be wound down. The only reason the company is even showing a profit is because they repeatedly diluted shareholders to raise cash and then re-invested that money into Treasuries. Basically, if you are buying GME stock, you are getting an expensive fixed income wrapper. Buying EBAY would be a bad deal for pretty much everyone involved. GME shareholders get diluted to buy EBAY for way too much money. EBAY shareholders get paid in vastly overvalued GME shares. And the entire thing would be managed by some guy whose only strategic idea is to cut costs. The only one who would benefit is Cohen, because it would create a sufficiently liquid market for him to sell his stake, something that is not currently possible in GME.

andruby 6mo ago

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

shmatt 6mo ago
Except a sudden dilution usually tanks the stock by the exact % its diluting So GME dilutes by 20%, stock price immediately goes down by 20%. its not some infinite money hack
- sokoloff 6mo ago
  Except in this case, the company also now owns EBay with a market cap of around $44B before the takeover bid was announced. I don’t think GP was claiming it was an infinite money hack at all.
Panzer04 6mo ago
Basically a merger.

archon810 6mo ago

Here's the GME CEO attempting to explain the deal https://x.com/i/status/2051303211668021478 https://x.com/i/status/2051303211668021478. And "Attempting" is doing the heavy lifting here.

cloudfudge 6mo ago
"Attempting" is not in any way a valid description of what he's doing there. That was a wild clip.