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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 buy

• 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.
      • harrall 5mo ago
        I don’t know about everybody else but I both sell and buy on eBay items that are more niche but not totally bespoke like on Etsy (e.g. photography equipment or specific hats). Which means an eBay store would never make sense for my type of buyer or seller because I would just go to one of the many other existing entrenched retailers for regular things. I know eBay pushes hard for regular retail but ultimately I see it as a marketplace for less fungible items and that’s what it excels at. Regular retail for regular items is easier because the user experience is always standard. GameStop is trying to sit in the middle and trying to move product that is a little more fungible (previously used games and now more trading cards and collectibles) but I just don’t know how big of a market it is when you have to factor brick and mortar upkeep. I don’t want them to take down eBay in an experiment.
  • 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.