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eBay Rejects GameStop's $56B Takeover as Not Credible

237 points by voisin 5mo ago

tombert 5mo ago
I really thought it was going to be the other way around. I am quite confident that if GameStop bought eBay, they would ruin it in the same way that K-Mart buying Sears ruined that company. I could be wrong, I'm not a business person, but it seems kind of obvious that a company like GameStop, whose current existence appears to be due to a weird short squeeze anomaly, is not a sustainable business.
- colechristensen 5mo ago
  Gamestop turning into an eBay storefront makes a lot of sense to me and this seemed to be a very rational step to take when the short squeeze anomaly left them with billions in the bank and a business model that no longer makes very much sense with physical game sales being eaten by digital-only sales along with the potential decline of the console. They already have the position of used buying and sales, extending that into in store receiving and listing of items on eBay makes sense. eBay being in decline as well. >K-Mart buying Sears ruined that company Both were quite dead by the time that happened.
  - redsocksfan45 5mo ago
    [dead]
  - tombert 5mo ago
    I guess it comes to management. I agree that if GameStop were basically rebranded as eBay brick and mortar stores, that might work. I guess I just feel like if it were GameStop itself that were managing it then it would be unlikely to actually work. It's not like digital storefronts are new; I think GameStop should have been pivoting the moment that Steam started getting traction.
    - coffeebeqn 5mo ago
      They’re only 22 years behind
    - boringg 5mo ago
      Im pretty sure thats what the CEO pitched.
    - m348e912 5mo ago
      You guys might not have seen the recent interviews (last week) with gamestop CEO Ryan Cohen. Gamestop has already pivoted, game and console sales are cyclical and hard to base a business upon. They have leaned hard into collectables as a way to expand their business and retail model. I am unsure how a Gamestop/eBay storefront would do. Physical manifestations of "eBay stores" have existed in the past and none of them did very well long term.
      - colechristensen 5mo ago
        >I am unsure how a Gamestop/eBay storefront would do. Physical manifestations of "eBay stores" have existed in the past and none of them did very well long term. A key here I think is the easy gradual transition here because Gamestop already has the used games business they could slowly integrate that into listing used games on eBay that were received at stores and then add related categories step by step with collectables and consumer electronics. There'd also be options of ebay items delivered to store which increases store traffic and doesn't involve giving strangers on the internet your home address, and there might be opportunities there to enter logistics and lower delivery costs for people.
      - Scoundreller 5mo ago
        Dunno how gamestop’s logistics works but they could leverage the existing shops as dropoff points for sellers and offer a pickup point option to bypass the postal system. eBay sellers are at a disadvantage vs Amazon warehouse sellers when it comes to shipping costs. At least my shipping broker in Canada uses small retail stores as dropoff points and then has a network of gig courier delivery companies they send stuff to for last mile delivery. Saves a lot on shipping costs. I’ve noticed they don’t really integrate with gig couriers for last mile US shipments, just a few consolidators for mid-mile (eg: UPS Mail Innovations that uses USPS for last mile) Might further delay delivery times but I use eBay to save some dollars in exchange for delayed gratification.
  - yalogin 5mo ago
    They still don’t have anywhere close to buying eBay.
    - boringg 5mo ago
      Please see: Leveraged Buy Out. For the benefit of all the people on this thread not understanding what the proposal is for the acqusition: "A leveraged buyout (LBO) is the acquisition of a company (typically by a private equity firm) using a significant amount of borrowed money (debt) to meet the purchase price, often 60% to 90% of the total cost. The target company’s assets are used as collateral for the loans, which are repaid using the company's future cash flows."
      - applfanboysbgon 5mo ago
        Everybody understands the proposal. They also understand that an offer of $20 billion loan + $7.5b cash in hand + stock in Gamestop valued by the market at $11b = $37.5b, which is < $55b, a discrepancy Cohen has not been able to account for. Ebay also understands that leveraged buy-outs are a death sentence, and that saddling its operations with $20b of debt in exchange for gaining a dead business like Gamestop would eventually kill it.
        rtkwe 5mo ago
        Also when you count that 7.5B cash on hand as part of the deal to me that's to some extent double counting to include it and the current market value of all of GME's stock. At least part of the stock's value comes from the existence of the cash so it's not wholly separate from the value of the stock.
      - rtkwe 5mo ago
        The $20B letter from TB is the leveraged part of the buy out and the math still doesn't add up even if you for some reason allow GME to dispose of all their cash in the deal without taking a hit to their stock price.
      - yalogin 5mo ago
  - rtkwe 5mo ago
    I've yet to see a convincing vision of what an eBay physical store looks like that doesn't kind of boil down to a UPS store. The vast majority of their business comes from 3rd party listings and the only real stock they have and sell are in the eBay refurbished line. I'm really not convinced of what a successful eBay store would even be there for. I've seen some say for authentication but staffing employees able to perform that authentication at even a fraction of existing GameStop stores would be extremely expensive (unless it's terrible authentication) so it again devolves to basically being a UPS store but for eBay shipping items out to be authenticated. Similar to what GameStop does with Pokemon cards and PSA grading except you can't really slab a Rolex or handbag so the authentication is only good so long as the good remains in the hands of the authenticator. The only small service I think they could offer is a way for sellers to certify what's being shipped to avoid contests, but having that in every GameStop store is also very expensive for a cost they currently just shift onto sellers by siding with the customer. eBay could easily implement that if they wanted by partnering with UPS stores or a program where sellers video the packing or something.
    - colechristensen 5mo ago
      >I've yet to see a convincing vision of what an eBay physical store looks like that doesn't kind of boil down to a UPS store. Pawn shop for nerds/the middle class. They could build AI to help authentication and just identifying sellers would help tremendously with fraud.
      - rtkwe 5mo ago
        > Pawn shop for nerds/the middle class. That's kind of but not really what GameStop was before digital games took over and isn't what eBay is. A majority of Pawn Shop business is in the name pawns and neither eBay nor GameStop have ever done. > They could build AI to help authentication and just identifying sellers would help tremendously with fraud. That's a huge step beyond reasonable, there have been billions spent on the current AIs and none of them are up to the task of telling a good fake from a real item. Maybe one day but that's ages away. And fraud doesn't just happen on the seller side, a big headache for sellers is buyer fraud where they'll claim the item is wrong/broken and there's almost no recourse for sellers to prove that's incorrect. eBay could just as easily partner with UPS stores to implement seller and buyer authentication anyways there's not a huge benefit to GameStop in particular being the partner there. It's always been an option and they haven't taken it.
  - DSMan195276 5mo ago
    > They already have the position of used buying and sales, extending that into in store receiving and listing of items on eBay makes sense. Why do they need to buy eBay to do that?
  - xp84 5mo ago
    I think you’re right about Kmart/Sears, though the interesting thing was that Lampert was correct that Sears had a great deal of real estate which had tremendous value. If someone skilled at retail had bought it, they could have used the money from selling some of that, to fix the business. Of course, Lampert was only skilled at finance and RE and very obviously just planned to gently wind down the business while selling off its assets, which is much less risky to do than fixing it - and may have yielded better financial results anyway. That’s why the popular perception is that the Kmart transaction and Lampert killed it, even though their lot had really been cast 15+ years before, when they stopped innovating, and really stopped investing in their stores completely, without getting serious about e-commerce either. That poisoned their brand, which made it really hard to imagine turning it around.
    - projektfu 5mo ago
      And really you could say that Discover killed it, because they lost focus on the core (or legacy?) business. Still, department stores in the US are nothing like they were in their heyday.
      - xp84 5mo ago
        Sears and Kmart both did so much diversification in the ~1980s! Discover, Allstate insurance, Dean Witter, Coldwell Banker for Sears (and Kmart had bought Borders, Builders Square, PACE, OfficeMax). If you trace the total return to a holder of Sears stock c. 1980, including the value they would have received in terms of stock in the spinoffs, the shareholders themselves may have actually ended up doing quite well in our timeline, even compared to one where Sears had reinvested all their profits into Sears, Roebuck & Co and maintained a more dominant retailing business as a result. It seems like no one really cared if the core business succeeded or failed, though.
- danvayn 5mo ago
  The TD Bank securities commitment of 20B to finance the deal and GameStop having a market cap far below the acquisition cost suggests that buying eBay would’ve been very problematic and risky for investors. But comparing it to K mart buying sears isn’t really accurate to me. Like yeah, GameStop clearly fits into the death of retail, and acquiring eBay does increase their market visibility or presence. Beyond that, what ebay/GS could’ve gained is way different and arguably more substantial than what acquiring Sears did for either company involved. Atleast here, one operates storefronts for second hand transactions and the other expressly doesn’t. There is definitely money in that.
  - jader201 5mo ago
    I'm not sure I follow/buy the premise of moving second-hand sales to a physical building as beneficial to eBay. If I'm looking for X, I'd much rather go to an online store, where I have access to several listings of X at varying prices and condition, vs. make a trip to a physical store, see if they have X, and hope that the condition and price matches my expectations. Maybe if I'm not looking for X, and just want to browse a bunch of stuff (e.g. yardsale/flea market style), then a physical store could make sense. But, to me, having this middle-man physical presence was already a problem, and eBay solved this. I just don't feel like eBay needs GameStop. Now, whether GameStop needs eBay is a different story. But GameStop is in trouble for two reasons: 1. Video games -- and therefore video game sales -- are moving to digital. 2. Physical stores are becoming a thing of the past for retail transactions. eBay doesn't need GameStop's troubles.
    - tombert 5mo ago
      I could see it potentially be something like the Walmart pickup service? Last mile delivery is pretty expensive, so conceivably they could offer faster and/or cheaper shipping if you picked it up at a physical store. I don't know. I don't think this acquisition would be a good idea.
    - xp84 5mo ago
      ^This. The crazy part is that in today’s PE-style system of things, the incentives… - GameStop shareholders - GameStop the company - e.g. employees - eBay shareholders - eBay the company - for example its employees …aren’t necessarily aligned. If GAME buys EBAY - it’s an exit for the EBAY shareholders, which is easy for them to evaluate as it’s presumably a $ premium over the share price today. If GAME then runs the company into the ground trying to free up the cash to pay off the acquisition debt, as most leveraged buyouts do (especially where retail is involved), that’s not a problem for those already-exited shareholders, though it is probably a problem for employees of either company.
- aresant 5mo ago
  The context this comment misses is Gamestop's secret weapon is their CEO Ryan Cohen who has been sitting around the hoop trying to figure out how to leverage Gamestop's fundraising capabilities to do something big Couple of highlights on Ryan - Built and sold Chewy from a startup to the largest ecomm acq of all time - Became #1 individual shareholder of Apple early on - Bought a 10% share of Gamespot in 2020 becoming largest personal shareholder - Took over as CEO after being a proactive board member, works for no salary https://en.wikipedia.org/wiki/Ryan_Cohen https://en.wikipedia.org/wiki/Ryan_Cohen
  - matthewdgreen 5mo ago
    I wish we would normalize people just running a business well and taking a damned salary.
    - love2read 5mo ago
      You want to normalize low ambitions?
      - jader201 5mo ago
        "Running a business well" is now "low ambitions"?
      - triceratops 5mo ago
        Doing a good job without it benefiting your personally.
      - GuinansEyebrows 5mo ago
        unironically, yes. go get good at tetris if you need a high score for personal validation.
      - Bjartr 5mo ago
        While successfully running a business in a sustainable way may not be the peak of ambition, calling it low ambition is toxic in the other direction.
- at-fates-hands 5mo ago
  >> whose current existence appears to be due to a weird short squeeze anomaly, is not a sustainable business. I remember working in a CD Warehouse in the early aughts. Our store was next door to a Game Stop. The woman who worked at the Game Stop would come over and chat music with me when her store was slow. We used to joke about how both of our industries are seemingly dying a slow death. Console and game prices were going through the roof at the time. Compact Discs were being replaced by downloadable music. A few months before I quit, we finally started reselling DVD's to buoy the CD reselling part of the store. As it turns out, the gaming industry outlasted the CD reselling business by quite a bit. lol
- pibaker 5mo ago
  K mart is at the very minimum a viable business. GameStop is a meme stock attached to the brand of a moribund business model. I just don't see a world where GameStop's core business ever gains relevance again when gamers have shown a strong revealed preference for digital games over physical ones. This proposal never made any sense and it speaks volumes about the lunacy of the market that anyone takes it seriously at all.
SwellJoe 5mo ago
Any reasonable person could see this was a ridiculous clown show, put on by the ridiculous clown show meme stock company.
- CodeWriter23 5mo ago
  This movie isn't over yet. We'll have to wait and see if GameStop goes full 80's on them with a hostile takeover attempt.
  - kotaKat 5mo ago
    Meanwhile they're now working on getting approval to dilute out another billion or so shares: https://www.sec.gov/ix?doc=/Archives/edgar/data/0001326380/000119312526217168/d937376dpre14a.htm#toc937376_151 https://www.sec.gov/ix?doc=/Archives/edgar/data/0001326380/0... "We are asking our stockholders to approve an amendment to our Third Amended and Restated Certificate of Incorporation, as amended by the Certificate of Amendment dated June 2, 2022 (the “Existing Charter”), to increase the number of authorized shares of our common stock to 2,500,000,000, and correspondingly increase the number of authorized shares of all classes of our stock to 2,505,000,000 for the reasons discussed below. Our Existing Charter currently authorizes the issuance of 1,000,000,000 shares of common stock and 5,000,000 shares of preferred stock."
    - SwellJoe 5mo ago
      Cocaine (or whatever their CEO is on) doesn't buy itself. Edit: Also, the fact that company leadership can get away with this kind of thing, fleecing retail investors for millions/billions of dollars, and face no consequences is...I dunno. I guess it's just normal now. Lawlessness, bribery, favors to the right politicians, lying without hesitation or remorse. People in media clutching their pearls over whatever the Gen Z kids are getting up to on TikTok while this shit is going on is just the icing on the cake.
    - WJW 5mo ago
      I thought their stockholders were super into direct registration to trigger the "mother of all short squeezes" when (or so the conspiracy went anyway) all the evil hedge funds would have to buy back their alleged naked shorts for infinite money. That doesn't really play well with Gamestop putting 1.5 billion extra shares on the market, which is basically exactly the reverse of a short squeeze and would surely push down prices. Or was this a 2022 thing and Gamestop investors have moved on from diamond handing?
gedy 5mo ago
I'm pretty sure this was just a stunt to manipulate both stock prices for some short term play.
- Scoundreller 5mo ago
  It’s been a lot of (unintentional) free advertising for eBay and they’re not even doing a good job of embracing that. Probably more people than ever have thought of starting a shopping search on eBay than ever (outside pandemic shortages).
cmiles8 5mo ago
Well if you’ve seen the CNBC interview with the GameStop CEO he couldn’t answer basic questions about the deal so the outcome here isn’t surprising. The interview was so bad the first time I saw it I thought it was some sort of satire bit. No, it was real and the commentators were literally speechless.
- deleted 5mo ago
  [deleted]
- Scoundreller 5mo ago
  Tbh, if you can convince someone to take your relatively worthless pieces of paper in exchange for your valuable asset, then your worthless pieces of paper are no longer worthless. Not much different than me having a bit of cash and putting 5% or 20% down to buy a home or car: now I’m a big asset and debt holder and you got some pieces of paper with dead presidents on it. That was the hard part of the deal: will (enough) eBay shareholders want to be GameStop shareholders. eBay shareholders would be right to be upset with eBay management. eBay has treaded water in a niche of online shopping while online shopping has grown massively. Whether GameStop is their solution or not, Iunno.
  - Normal_gaussian 5mo ago
    https://www.google.com/finance/beta/quote/EBAY:NASDAQ?window=MAX https://www.google.com/finance/beta/quote/EBAY:NASDAQ?window... eBay is doing fine.
    - Scoundreller 5mo ago
      $49b market cap. Today Amazon is down 1.8%, or down ~$52b today. EBay is surviving but blew the online shopping wave, despite having owned (and created?) a big proportion of it.
  - stephen_g 5mo ago
    > That was the hard part of the deal: will (enough) eBay shareholders want to be GameStop shareholders. There is no upside for eBay shareholders - a leveraged buyout makes sense if it's for 100% cash, because the buyers are taking the risk and the debt, and the sellers get the cash. But in this deal, Gamestop need to borrow the money to pay 50% to eBay's shareholders, but then the other 50% eBay's shareholders get is shares in the company that holds all that debt!?! It would be better for eBay's investors if eBay themselves just borrowed $20bn to do share buybacks. I mean, it would still be dumb and make absolutely no financial sense (because they still hold shares in the company that holds the debt) but at least they wouldn't have the extra liability of Gamestop's dwindling business on the side.
qrush 5mo ago
As a avid eBay customer I am pretty relieved. I buy 2-3 items a month and was selling for the last 2 years on the platform. It's come such a long way and is really a great, streamlined experience. Of course I'm sure folks that make their living off their stores & sales will have different opinions, but I'd say as a routine customer and seller it doesn't need an external company's takeover pressure on it.
- hx8 5mo ago
  I agree. eBay has a strong brand, one of the oldest web brands. It should just continue doing what it's doing.
  - cryptoegorophy 5mo ago
    They probably should do more marketing.
    - benj111 5mo ago
      Why? Who isn't aware of eBay?
      - fragmede 5mo ago
        It's about the brand. Ehen shopping online, everyone may have heard of eBay, but how many people are going to go there first, as opposed to Amazon, Etsy, AliExpress, Temu, wherever else. And yes, eBay is going to have the weird eBay stuff, but if users don't even think to go looking there, they've lost a sale.
        dgellow 5mo ago
        They aren’t competing with Amazon anymore though
        dfxm12 5mo ago
        As one data point, if I want something new, I go Amazon first and eBay second. If I want something used, I go to eBay first. My search usually ends there, but if I can't find it there, I probably have to go to a specialty forum. Even for bootleg stuff (mostly long out of print arcade hardware), eBay is pretty much on par with AliExpress.
bstsb 5mo ago
alternate link: https://archive.ph/rsC6e https://archive.ph/rsC6e
echelon 5mo ago
Here's the biggest reason why - GameStop CEO Ryan Cohen gets a performance pay if the market cap goes up: > The total award consists of stock options to purchase 171,537,327 shares of the Company's Class A common stock at a price of $20.66 per share. Tranche Award% Market Cap Hurdle EBITDA Hurdle 1 10% $20 Billion $2.0 Billion 2 10% $30 Billion $3.0 Billion 3 10% $40 Billion $4.0 Billion 4 10% $50 Billion $5.0 Billion 5 10% $60 Billion $6.0 Billion 6 10% $70 Billion $7.0 Billion 7 10% $80 Billion $8.0 Billion 8 15% $90 Billion $9.0 Billion 9 15% $100 Billion $10.0 Billion Swallowing a new company, even if it takes on debt, can bump this up. eBay market cap is $48B. https://investor.gamestop.com/news-releases/news-details/2026/GameStop-Announces-Long-Term-Performance-Award-for-Ryan-Cohen/default.aspx https://investor.gamestop.com/news-releases/news-details/202...
- shimman 5mo ago
  There's nothing in Ryan Cohen's career that instills confidence to me. He seems like another tech leader that just got lucky at selling their company (which was only unprofitable for the majority of its lifetime until very very recently) during an economic era that is unlikely to return in any of our lifetimes (or our children's lifetimes).
- tomku 5mo ago
  There's a section of his pay package that says: The Performance Hurdles will be adjusted by the Committee equitably and proportionately as determined by the Committee in a manner designed to preserve the economic opportunity provided under the Award, (a) higher to account for acquisition activity for which stock is provided as consideration; and (b) lower to account for a split-up, spin-off, dividend or other distribution (whether in the form of cash, shares, other securities, or other property) or divestiture activity, in each case, that could be considered material to the achievement of the Performance Hurdles, as applicable. Matt Levine's recent opinion piece for Bloomberg ("GameStop Doesn’t Have Enough Stock", https://archive.ph/3h8wf https://archive.ph/3h8wf) goes into a bit more detail about it, including why such an acquisition might still help him get there even if it doesn't instantly get him halfway.
avonmach 5mo ago
Seems like a no brainer for people who want to go into a physical store without dealing with the hassle of waiting for the item to sell along with packaging and shipping.
- hx8 5mo ago
  Who wants to go to a physical store in 2026?
  - honeycrispy 5mo ago
    Me. I love the experience of getting out of the house. Also, online shopping is an extortionist on certain items. There are so many things that are 1/4 the price in a physical store than they are online due to shipping and logistics.
    - stephen_g 5mo ago
      I like browsing stuff in stores too, but that's not what eBay is for - I'm in Australia, the whole point is I can buy stuff from other states in my country, or from the US or other countries if I need, and in the same way I can sell stuff to people in Europe or the UK or Canada or the US from home. Seeing stuff in person is cool but for an 'eBay Store' you're only going to have a tiny assortment of items, and likely hardly anything you really want in any one physical location... These kind of things already exist (e.g. pawn shops, or here in Australia we have a chain called Cash Converters but it's mostly disappearing) and eBay's value proposition is different in that it opens that up from just items from people within driving range, to anyone around the world. So having physical stores doesn't add much value for eBay.
  - ecshafer 5mo ago
    I do. Its great. You can walk around, look at things, talk to people, maybe buy something you wouldn't based on cover art or whatever. You get to drive a little, listen to some music.
    - 5mo ago
xnx 5mo ago
A marketing stunt just like when (and I'm reluctant to use their name) Perplexity said it would buy Chrome.
- doublerabbit 5mo ago
  Polarize the people, it doesn't matter if they shout your name.
- mrweasel 5mo ago
  Oh wauw, I already forgot that Perplexity exists.
Imustaskforhelp 5mo ago
alternative link on archive.org using htmlpipe[0] :https://web.archive.org/web/20260512164713/http://serjaimelannister.github.io/htmlpipe/?https://ppng.io/rsC6e https://web.archive.org/web/20260512164713/http://serjaimela... Kind reminder to donate to archive.org: https://archive.org/donate https://archive.org/donate This helps because google captcha now sometimes require android phone qr code scanning etc. so I have uploaded the article on archive.org [0]: I am creator of htmlpipe which archives archive.is pages on archive.org (I was gonna add it as a comment below bstsb but it seems to have been detached now so can't comment on it)
pluc 5mo ago
GameStop forgot to pivot to AI-first before making the offer.
- geephroh 5mo ago
  [polite golf clap]
arealaccount 5mo ago
> Cohen last week offered $125 a share — consisting of 50% cash and 50% GameStop stock So he's basically looking to launder his freshly minted meme stonks into legitimate real company stock. It's shocking they don't want it.
taffydavid 5mo ago
I thought gamestop was in financial trouble a few years back, how can they afford 56 billion?
- kjkjadksj 5mo ago
  The stock became a meme
- dgellow 5mo ago
  They cannot
- wavemode 5mo ago
  GameStop is a zombie company. As a retailer, they have been floundering for years and still are. But as a corporation, they are sitting on a lot of cash and zero debt, from the early-pandemic period they went through as an overvalued meme stock. They can't afford $56 billion - the proposed acquisition was going to be halfway paid for in stock and halfway via a loan. (Though, they also can't afford $28B in stock - the entire company is only worth $10B - so the idea was going to be to pay for it by issuing new shares of the merged GameStop-Ebay entity, after the deal was signed.) If that sounds audacious, it's because it is - as far as I've seen, most analysts were not expecting this deal to be taken seriously, and many are calling it a publicity stunt.
  - saghm 5mo ago
    "Audacious" is underselling it. "Give me your assets and I'll pay you with them" is about as serious a plan as "I'll go the ATM and get all the free money they give out to pay for it"
    - nullocator 5mo ago
      Works for Elon Musk
- saghm 5mo ago
  Based on their CEO's angry refusal to explain further in TV interviews, it doesn't seem like they can, which is why eBay said that it wasn't a credible offer. It sounds like this is just a way to get a few more headlines for GameStop to keep their meme stock value a bit longer, along with a claim that they're being treated unfairly (which isn't substantive, but then again neither is the basis for their meme stock value, so that might be irrelevant to the ones this PR is attempting to target).
deleted 5mo ago
[deleted]
gigatexal 5mo ago
.... and the sky is blue, news at 11. of course the offer wasn't serious. did anyone see the interview GameStop CEO did with Andrew Ross Sorkin? he clearly didn't have the money and was trying to gaslight the world.
cestith 5mo ago
If eBay really wanted to sell itself, I’d propose a no reserve auction with the bids starting at $420.
Topgamer7 5mo ago
The eBay AstroTurf in this thread is real. eBay is a hot piece of garbage, just go watch testimonials of sellers getting ripped off with no recourse. That being said I don't really care whether either end of the sale goes through.
- duxup 5mo ago
  What makes it astroturf? You not liking what people said?
duxup 5mo ago
Nice to see one of those heavily leveraged deals turned down.
JKCalhoun 5mo ago
I had the sense this was never a serious, newsworthy story. Just a wild boast that somehow got clicks.

237 points by voisin 5mo ago

I really thought it was going to be the other way around. I am quite confident that if GameStop bought eBay, they would ruin it in the same way that K-Mart buying Sears ruined that company. I could be wrong, I'm not a business person, but it seems kind of obvious that a company like GameStop, whose current existence appears to be due to a weird short squeeze anomaly, is not a sustainable business.

colechristensen 5mo ago
Gamestop turning into an eBay storefront makes a lot of sense to me and this seemed to be a very rational step to take when the short squeeze anomaly left them with billions in the bank and a business model that no longer makes very much sense with physical game sales being eaten by digital-only sales along with the potential decline of the console. They already have the position of used buying and sales, extending that into in store receiving and listing of items on eBay makes sense. eBay being in decline as well. >K-Mart buying Sears ruined that company Both were quite dead by the time that happened.
- redsocksfan45 5mo ago
  [dead]
- tombert 5mo ago
  I guess it comes to management. I agree that if GameStop were basically rebranded as eBay brick and mortar stores, that might work. I guess I just feel like if it were GameStop itself that were managing it then it would be unlikely to actually work. It's not like digital storefronts are new; I think GameStop should have been pivoting the moment that Steam started getting traction.
  - coffeebeqn 5mo ago
    They’re only 22 years behind
  - boringg 5mo ago
    Im pretty sure thats what the CEO pitched.
  - m348e912 5mo ago
    You guys might not have seen the recent interviews (last week) with gamestop CEO Ryan Cohen. Gamestop has already pivoted, game and console sales are cyclical and hard to base a business upon. They have leaned hard into collectables as a way to expand their business and retail model. I am unsure how a Gamestop/eBay storefront would do. Physical manifestations of "eBay stores" have existed in the past and none of them did very well long term.
    - colechristensen 5mo ago
      >I am unsure how a Gamestop/eBay storefront would do. Physical manifestations of "eBay stores" have existed in the past and none of them did very well long term. A key here I think is the easy gradual transition here because Gamestop already has the used games business they could slowly integrate that into listing used games on eBay that were received at stores and then add related categories step by step with collectables and consumer electronics. There'd also be options of ebay items delivered to store which increases store traffic and doesn't involve giving strangers on the internet your home address, and there might be opportunities there to enter logistics and lower delivery costs for people.
    - Scoundreller 5mo ago
      Dunno how gamestop’s logistics works but they could leverage the existing shops as dropoff points for sellers and offer a pickup point option to bypass the postal system. eBay sellers are at a disadvantage vs Amazon warehouse sellers when it comes to shipping costs. At least my shipping broker in Canada uses small retail stores as dropoff points and then has a network of gig courier delivery companies they send stuff to for last mile delivery. Saves a lot on shipping costs. I’ve noticed they don’t really integrate with gig couriers for last mile US shipments, just a few consolidators for mid-mile (eg: UPS Mail Innovations that uses USPS for last mile) Might further delay delivery times but I use eBay to save some dollars in exchange for delayed gratification.
- yalogin 5mo ago
  They still don’t have anywhere close to buying eBay.
  - boringg 5mo ago
    Please see: Leveraged Buy Out. For the benefit of all the people on this thread not understanding what the proposal is for the acqusition: "A leveraged buyout (LBO) is the acquisition of a company (typically by a private equity firm) using a significant amount of borrowed money (debt) to meet the purchase price, often 60% to 90% of the total cost. The target company’s assets are used as collateral for the loans, which are repaid using the company's future cash flows."
    - applfanboysbgon 5mo ago
      Everybody understands the proposal. They also understand that an offer of $20 billion loan + $7.5b cash in hand + stock in Gamestop valued by the market at $11b = $37.5b, which is < $55b, a discrepancy Cohen has not been able to account for. Ebay also understands that leveraged buy-outs are a death sentence, and that saddling its operations with $20b of debt in exchange for gaining a dead business like Gamestop would eventually kill it.
      - rtkwe 5mo ago
        Also when you count that 7.5B cash on hand as part of the deal to me that's to some extent double counting to include it and the current market value of all of GME's stock. At least part of the stock's value comes from the existence of the cash so it's not wholly separate from the value of the stock.
    - rtkwe 5mo ago
      The $20B letter from TB is the leveraged part of the buy out and the math still doesn't add up even if you for some reason allow GME to dispose of all their cash in the deal without taking a hit to their stock price.
    - yalogin 5mo ago
- rtkwe 5mo ago
  I've yet to see a convincing vision of what an eBay physical store looks like that doesn't kind of boil down to a UPS store. The vast majority of their business comes from 3rd party listings and the only real stock they have and sell are in the eBay refurbished line. I'm really not convinced of what a successful eBay store would even be there for. I've seen some say for authentication but staffing employees able to perform that authentication at even a fraction of existing GameStop stores would be extremely expensive (unless it's terrible authentication) so it again devolves to basically being a UPS store but for eBay shipping items out to be authenticated. Similar to what GameStop does with Pokemon cards and PSA grading except you can't really slab a Rolex or handbag so the authentication is only good so long as the good remains in the hands of the authenticator. The only small service I think they could offer is a way for sellers to certify what's being shipped to avoid contests, but having that in every GameStop store is also very expensive for a cost they currently just shift onto sellers by siding with the customer. eBay could easily implement that if they wanted by partnering with UPS stores or a program where sellers video the packing or something.
  - colechristensen 5mo ago
    >I've yet to see a convincing vision of what an eBay physical store looks like that doesn't kind of boil down to a UPS store. Pawn shop for nerds/the middle class. They could build AI to help authentication and just identifying sellers would help tremendously with fraud.
    - rtkwe 5mo ago
      > Pawn shop for nerds/the middle class. That's kind of but not really what GameStop was before digital games took over and isn't what eBay is. A majority of Pawn Shop business is in the name pawns and neither eBay nor GameStop have ever done. > They could build AI to help authentication and just identifying sellers would help tremendously with fraud. That's a huge step beyond reasonable, there have been billions spent on the current AIs and none of them are up to the task of telling a good fake from a real item. Maybe one day but that's ages away. And fraud doesn't just happen on the seller side, a big headache for sellers is buyer fraud where they'll claim the item is wrong/broken and there's almost no recourse for sellers to prove that's incorrect. eBay could just as easily partner with UPS stores to implement seller and buyer authentication anyways there's not a huge benefit to GameStop in particular being the partner there. It's always been an option and they haven't taken it.
- DSMan195276 5mo ago
  > They already have the position of used buying and sales, extending that into in store receiving and listing of items on eBay makes sense. Why do they need to buy eBay to do that?
- xp84 5mo ago
  I think you’re right about Kmart/Sears, though the interesting thing was that Lampert was correct that Sears had a great deal of real estate which had tremendous value. If someone skilled at retail had bought it, they could have used the money from selling some of that, to fix the business. Of course, Lampert was only skilled at finance and RE and very obviously just planned to gently wind down the business while selling off its assets, which is much less risky to do than fixing it - and may have yielded better financial results anyway. That’s why the popular perception is that the Kmart transaction and Lampert killed it, even though their lot had really been cast 15+ years before, when they stopped innovating, and really stopped investing in their stores completely, without getting serious about e-commerce either. That poisoned their brand, which made it really hard to imagine turning it around.
  - projektfu 5mo ago
    And really you could say that Discover killed it, because they lost focus on the core (or legacy?) business. Still, department stores in the US are nothing like they were in their heyday.
    - xp84 5mo ago
      Sears and Kmart both did so much diversification in the ~1980s! Discover, Allstate insurance, Dean Witter, Coldwell Banker for Sears (and Kmart had bought Borders, Builders Square, PACE, OfficeMax). If you trace the total return to a holder of Sears stock c. 1980, including the value they would have received in terms of stock in the spinoffs, the shareholders themselves may have actually ended up doing quite well in our timeline, even compared to one where Sears had reinvested all their profits into Sears, Roebuck & Co and maintained a more dominant retailing business as a result. It seems like no one really cared if the core business succeeded or failed, though.
danvayn 5mo ago
The TD Bank securities commitment of 20B to finance the deal and GameStop having a market cap far below the acquisition cost suggests that buying eBay would’ve been very problematic and risky for investors. But comparing it to K mart buying sears isn’t really accurate to me. Like yeah, GameStop clearly fits into the death of retail, and acquiring eBay does increase their market visibility or presence. Beyond that, what ebay/GS could’ve gained is way different and arguably more substantial than what acquiring Sears did for either company involved. Atleast here, one operates storefronts for second hand transactions and the other expressly doesn’t. There is definitely money in that.
- jader201 5mo ago
  I'm not sure I follow/buy the premise of moving second-hand sales to a physical building as beneficial to eBay. If I'm looking for X, I'd much rather go to an online store, where I have access to several listings of X at varying prices and condition, vs. make a trip to a physical store, see if they have X, and hope that the condition and price matches my expectations. Maybe if I'm not looking for X, and just want to browse a bunch of stuff (e.g. yardsale/flea market style), then a physical store could make sense. But, to me, having this middle-man physical presence was already a problem, and eBay solved this. I just don't feel like eBay needs GameStop. Now, whether GameStop needs eBay is a different story. But GameStop is in trouble for two reasons: 1. Video games -- and therefore video game sales -- are moving to digital. 2. Physical stores are becoming a thing of the past for retail transactions. eBay doesn't need GameStop's troubles.
  - tombert 5mo ago
    I could see it potentially be something like the Walmart pickup service? Last mile delivery is pretty expensive, so conceivably they could offer faster and/or cheaper shipping if you picked it up at a physical store. I don't know. I don't think this acquisition would be a good idea.
  - xp84 5mo ago
    ^This. The crazy part is that in today’s PE-style system of things, the incentives… - GameStop shareholders - GameStop the company - e.g. employees - eBay shareholders - eBay the company - for example its employees …aren’t necessarily aligned. If GAME buys EBAY - it’s an exit for the EBAY shareholders, which is easy for them to evaluate as it’s presumably a $ premium over the share price today. If GAME then runs the company into the ground trying to free up the cash to pay off the acquisition debt, as most leveraged buyouts do (especially where retail is involved), that’s not a problem for those already-exited shareholders, though it is probably a problem for employees of either company.
aresant 5mo ago
The context this comment misses is Gamestop's secret weapon is their CEO Ryan Cohen who has been sitting around the hoop trying to figure out how to leverage Gamestop's fundraising capabilities to do something big Couple of highlights on Ryan - Built and sold Chewy from a startup to the largest ecomm acq of all time - Became #1 individual shareholder of Apple early on - Bought a 10% share of Gamespot in 2020 becoming largest personal shareholder - Took over as CEO after being a proactive board member, works for no salary https://en.wikipedia.org/wiki/Ryan_Cohen https://en.wikipedia.org/wiki/Ryan_Cohen
- matthewdgreen 5mo ago
  I wish we would normalize people just running a business well and taking a damned salary.
  - love2read 5mo ago
    You want to normalize low ambitions?
    - jader201 5mo ago
      "Running a business well" is now "low ambitions"?
    - triceratops 5mo ago
      Doing a good job without it benefiting your personally.
    - GuinansEyebrows 5mo ago
      unironically, yes. go get good at tetris if you need a high score for personal validation.
    - Bjartr 5mo ago
      While successfully running a business in a sustainable way may not be the peak of ambition, calling it low ambition is toxic in the other direction.
at-fates-hands 5mo ago
>> whose current existence appears to be due to a weird short squeeze anomaly, is not a sustainable business. I remember working in a CD Warehouse in the early aughts. Our store was next door to a Game Stop. The woman who worked at the Game Stop would come over and chat music with me when her store was slow. We used to joke about how both of our industries are seemingly dying a slow death. Console and game prices were going through the roof at the time. Compact Discs were being replaced by downloadable music. A few months before I quit, we finally started reselling DVD's to buoy the CD reselling part of the store. As it turns out, the gaming industry outlasted the CD reselling business by quite a bit. lol
pibaker 5mo ago
K mart is at the very minimum a viable business. GameStop is a meme stock attached to the brand of a moribund business model. I just don't see a world where GameStop's core business ever gains relevance again when gamers have shown a strong revealed preference for digital games over physical ones. This proposal never made any sense and it speaks volumes about the lunacy of the market that anyone takes it seriously at all.

SwellJoe 5mo ago

Any reasonable person could see this was a ridiculous clown show, put on by the ridiculous clown show meme stock company.

CodeWriter23 5mo ago
This movie isn't over yet. We'll have to wait and see if GameStop goes full 80's on them with a hostile takeover attempt.
- kotaKat 5mo ago
  Meanwhile they're now working on getting approval to dilute out another billion or so shares: https://www.sec.gov/ix?doc=/Archives/edgar/data/0001326380/000119312526217168/d937376dpre14a.htm#toc937376_151 https://www.sec.gov/ix?doc=/Archives/edgar/data/0001326380/0... "We are asking our stockholders to approve an amendment to our Third Amended and Restated Certificate of Incorporation, as amended by the Certificate of Amendment dated June 2, 2022 (the “Existing Charter”), to increase the number of authorized shares of our common stock to 2,500,000,000, and correspondingly increase the number of authorized shares of all classes of our stock to 2,505,000,000 for the reasons discussed below. Our Existing Charter currently authorizes the issuance of 1,000,000,000 shares of common stock and 5,000,000 shares of preferred stock."
  - SwellJoe 5mo ago
    Cocaine (or whatever their CEO is on) doesn't buy itself. Edit: Also, the fact that company leadership can get away with this kind of thing, fleecing retail investors for millions/billions of dollars, and face no consequences is...I dunno. I guess it's just normal now. Lawlessness, bribery, favors to the right politicians, lying without hesitation or remorse. People in media clutching their pearls over whatever the Gen Z kids are getting up to on TikTok while this shit is going on is just the icing on the cake.
  - WJW 5mo ago
    I thought their stockholders were super into direct registration to trigger the "mother of all short squeezes" when (or so the conspiracy went anyway) all the evil hedge funds would have to buy back their alleged naked shorts for infinite money. That doesn't really play well with Gamestop putting 1.5 billion extra shares on the market, which is basically exactly the reverse of a short squeeze and would surely push down prices. Or was this a 2022 thing and Gamestop investors have moved on from diamond handing?

gedy 5mo ago

I'm pretty sure this was just a stunt to manipulate both stock prices for some short term play.

Scoundreller 5mo ago
It’s been a lot of (unintentional) free advertising for eBay and they’re not even doing a good job of embracing that. Probably more people than ever have thought of starting a shopping search on eBay than ever (outside pandemic shortages).

cmiles8 5mo ago

Well if you’ve seen the CNBC interview with the GameStop CEO he couldn’t answer basic questions about the deal so the outcome here isn’t surprising. The interview was so bad the first time I saw it I thought it was some sort of satire bit. No, it was real and the commentators were literally speechless.

deleted 5mo ago
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Scoundreller 5mo ago
Tbh, if you can convince someone to take your relatively worthless pieces of paper in exchange for your valuable asset, then your worthless pieces of paper are no longer worthless. Not much different than me having a bit of cash and putting 5% or 20% down to buy a home or car: now I’m a big asset and debt holder and you got some pieces of paper with dead presidents on it. That was the hard part of the deal: will (enough) eBay shareholders want to be GameStop shareholders. eBay shareholders would be right to be upset with eBay management. eBay has treaded water in a niche of online shopping while online shopping has grown massively. Whether GameStop is their solution or not, Iunno.
- Normal_gaussian 5mo ago
  https://www.google.com/finance/beta/quote/EBAY:NASDAQ?window=MAX https://www.google.com/finance/beta/quote/EBAY:NASDAQ?window... eBay is doing fine.
  - Scoundreller 5mo ago
    $49b market cap. Today Amazon is down 1.8%, or down ~$52b today. EBay is surviving but blew the online shopping wave, despite having owned (and created?) a big proportion of it.
- stephen_g 5mo ago
  > That was the hard part of the deal: will (enough) eBay shareholders want to be GameStop shareholders. There is no upside for eBay shareholders - a leveraged buyout makes sense if it's for 100% cash, because the buyers are taking the risk and the debt, and the sellers get the cash. But in this deal, Gamestop need to borrow the money to pay 50% to eBay's shareholders, but then the other 50% eBay's shareholders get is shares in the company that holds all that debt!?! It would be better for eBay's investors if eBay themselves just borrowed $20bn to do share buybacks. I mean, it would still be dumb and make absolutely no financial sense (because they still hold shares in the company that holds the debt) but at least they wouldn't have the extra liability of Gamestop's dwindling business on the side.

qrush 5mo ago

As a avid eBay customer I am pretty relieved. I buy 2-3 items a month and was selling for the last 2 years on the platform. It's come such a long way and is really a great, streamlined experience. Of course I'm sure folks that make their living off their stores & sales will have different opinions, but I'd say as a routine customer and seller it doesn't need an external company's takeover pressure on it.

hx8 5mo ago
I agree. eBay has a strong brand, one of the oldest web brands. It should just continue doing what it's doing.
- cryptoegorophy 5mo ago
  They probably should do more marketing.
  - benj111 5mo ago
    Why? Who isn't aware of eBay?
    - fragmede 5mo ago
      It's about the brand. Ehen shopping online, everyone may have heard of eBay, but how many people are going to go there first, as opposed to Amazon, Etsy, AliExpress, Temu, wherever else. And yes, eBay is going to have the weird eBay stuff, but if users don't even think to go looking there, they've lost a sale.
      - dgellow 5mo ago
        They aren’t competing with Amazon anymore though
      - dfxm12 5mo ago
        As one data point, if I want something new, I go Amazon first and eBay second. If I want something used, I go to eBay first. My search usually ends there, but if I can't find it there, I probably have to go to a specialty forum. Even for bootleg stuff (mostly long out of print arcade hardware), eBay is pretty much on par with AliExpress.

bstsb 5mo ago

alternate link: https://archive.ph/rsC6e https://archive.ph/rsC6e

echelon 5mo ago

Here's the biggest reason why - GameStop CEO Ryan Cohen gets a performance pay if the market cap goes up: > The total award consists of stock options to purchase 171,537,327 shares of the Company's Class A common stock at a price of $20.66 per share. Tranche Award% Market Cap Hurdle EBITDA Hurdle 1 10% $20 Billion $2.0 Billion 2 10% $30 Billion $3.0 Billion 3 10% $40 Billion $4.0 Billion 4 10% $50 Billion $5.0 Billion 5 10% $60 Billion $6.0 Billion 6 10% $70 Billion $7.0 Billion 7 10% $80 Billion $8.0 Billion 8 15% $90 Billion $9.0 Billion 9 15% $100 Billion $10.0 Billion Swallowing a new company, even if it takes on debt, can bump this up. eBay market cap is $48B. https://investor.gamestop.com/news-releases/news-details/2026/GameStop-Announces-Long-Term-Performance-Award-for-Ryan-Cohen/default.aspx https://investor.gamestop.com/news-releases/news-details/202...

shimman 5mo ago
There's nothing in Ryan Cohen's career that instills confidence to me. He seems like another tech leader that just got lucky at selling their company (which was only unprofitable for the majority of its lifetime until very very recently) during an economic era that is unlikely to return in any of our lifetimes (or our children's lifetimes).
tomku 5mo ago
There's a section of his pay package that says: The Performance Hurdles will be adjusted by the Committee equitably and proportionately as determined by the Committee in a manner designed to preserve the economic opportunity provided under the Award, (a) higher to account for acquisition activity for which stock is provided as consideration; and (b) lower to account for a split-up, spin-off, dividend or other distribution (whether in the form of cash, shares, other securities, or other property) or divestiture activity, in each case, that could be considered material to the achievement of the Performance Hurdles, as applicable. Matt Levine's recent opinion piece for Bloomberg ("GameStop Doesn’t Have Enough Stock", https://archive.ph/3h8wf https://archive.ph/3h8wf) goes into a bit more detail about it, including why such an acquisition might still help him get there even if it doesn't instantly get him halfway.

avonmach 5mo ago

Seems like a no brainer for people who want to go into a physical store without dealing with the hassle of waiting for the item to sell along with packaging and shipping.

hx8 5mo ago
Who wants to go to a physical store in 2026?
- honeycrispy 5mo ago
  Me. I love the experience of getting out of the house. Also, online shopping is an extortionist on certain items. There are so many things that are 1/4 the price in a physical store than they are online due to shipping and logistics.
  - stephen_g 5mo ago
    I like browsing stuff in stores too, but that's not what eBay is for - I'm in Australia, the whole point is I can buy stuff from other states in my country, or from the US or other countries if I need, and in the same way I can sell stuff to people in Europe or the UK or Canada or the US from home. Seeing stuff in person is cool but for an 'eBay Store' you're only going to have a tiny assortment of items, and likely hardly anything you really want in any one physical location... These kind of things already exist (e.g. pawn shops, or here in Australia we have a chain called Cash Converters but it's mostly disappearing) and eBay's value proposition is different in that it opens that up from just items from people within driving range, to anyone around the world. So having physical stores doesn't add much value for eBay.
- ecshafer 5mo ago
  I do. Its great. You can walk around, look at things, talk to people, maybe buy something you wouldn't based on cover art or whatever. You get to drive a little, listen to some music.
  - 5mo ago

xnx 5mo ago

A marketing stunt just like when (and I'm reluctant to use their name) Perplexity said it would buy Chrome.

doublerabbit 5mo ago
Polarize the people, it doesn't matter if they shout your name.
mrweasel 5mo ago
Oh wauw, I already forgot that Perplexity exists.

Imustaskforhelp 5mo ago

alternative link on archive.org using htmlpipe[0] :https://web.archive.org/web/20260512164713/http://serjaimelannister.github.io/htmlpipe/?https://ppng.io/rsC6e https://web.archive.org/web/20260512164713/http://serjaimela... Kind reminder to donate to archive.org: https://archive.org/donate https://archive.org/donate This helps because google captcha now sometimes require android phone qr code scanning etc. so I have uploaded the article on archive.org [0]: I am creator of htmlpipe which archives archive.is pages on archive.org (I was gonna add it as a comment below bstsb but it seems to have been detached now so can't comment on it)

pluc 5mo ago

GameStop forgot to pivot to AI-first before making the offer.

geephroh 5mo ago
[polite golf clap]

arealaccount 5mo ago

> Cohen last week offered $125 a share — consisting of 50% cash and 50% GameStop stock So he's basically looking to launder his freshly minted meme stonks into legitimate real company stock. It's shocking they don't want it.

taffydavid 5mo ago

I thought gamestop was in financial trouble a few years back, how can they afford 56 billion?

kjkjadksj 5mo ago
The stock became a meme
dgellow 5mo ago
They cannot
wavemode 5mo ago
GameStop is a zombie company. As a retailer, they have been floundering for years and still are. But as a corporation, they are sitting on a lot of cash and zero debt, from the early-pandemic period they went through as an overvalued meme stock. They can't afford $56 billion - the proposed acquisition was going to be halfway paid for in stock and halfway via a loan. (Though, they also can't afford $28B in stock - the entire company is only worth $10B - so the idea was going to be to pay for it by issuing new shares of the merged GameStop-Ebay entity, after the deal was signed.) If that sounds audacious, it's because it is - as far as I've seen, most analysts were not expecting this deal to be taken seriously, and many are calling it a publicity stunt.
- saghm 5mo ago
  "Audacious" is underselling it. "Give me your assets and I'll pay you with them" is about as serious a plan as "I'll go the ATM and get all the free money they give out to pay for it"
  - nullocator 5mo ago
    Works for Elon Musk
saghm 5mo ago
Based on their CEO's angry refusal to explain further in TV interviews, it doesn't seem like they can, which is why eBay said that it wasn't a credible offer. It sounds like this is just a way to get a few more headlines for GameStop to keep their meme stock value a bit longer, along with a claim that they're being treated unfairly (which isn't substantive, but then again neither is the basis for their meme stock value, so that might be irrelevant to the ones this PR is attempting to target).

deleted 5mo ago

[deleted]

gigatexal 5mo ago

.... and the sky is blue, news at 11. of course the offer wasn't serious. did anyone see the interview GameStop CEO did with Andrew Ross Sorkin? he clearly didn't have the money and was trying to gaslight the world.

cestith 5mo ago

If eBay really wanted to sell itself, I’d propose a no reserve auction with the bids starting at $420.

Topgamer7 5mo ago

The eBay AstroTurf in this thread is real. eBay is a hot piece of garbage, just go watch testimonials of sellers getting ripped off with no recourse. That being said I don't really care whether either end of the sale goes through.

duxup 5mo ago
What makes it astroturf? You not liking what people said?

duxup 5mo ago

Nice to see one of those heavily leveraged deals turned down.

JKCalhoun 5mo ago

I had the sense this was never a serious, newsworthy story. Just a wild boast that somehow got clicks.