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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 interv

by 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.
  - Scoundreller 5mo ago
    eBay does pay out a tiny dividend… would be better for everyone’s taxes if they did buybacks with it… If they leveraged up a bit more for even more buybacks, they wouldn’t be the first to do so.
romanhn 5mo ago
Just saw this for the first time. How someone can show up on a major network like this is beyond my understanding. Literally couldn't answer where the money would come from.
- imglorp 5mo ago
  Dilated pupils. Delayed responses. Inattentive gaze. Speaking nonsense. Drugs might explain many things.
  - conorcleary 5mo ago
    He works his ass off. You obviously can't spot a bear trap :-) The lower range of $GME the past couple of years is nowhere near where the shorts are going to have to buy-in.
    - Topfi 5mo ago
      If diluting your stock is a magical infinite money glitch, why doesn't Cohen just buy Nvidia? Heck, I think GOOG is now the most valuable, why not both? Throw TSLA in while you are at it and AMZN, I am sure there is some synergistic potential.
      - conorcleary 5mo ago
        Remember the term vapourware?
        Topfi 5mo ago
        Yes, what about it?
        conorcleary 5mo ago
        Alright I'll bite - go back to late 2020 and look at the stock market, then do some reading about the meme stock topic you wanna mock. Then measure your S&P 500 and valued stocks compared to who 'owns' them and who gets to value them. Then, if you're still with us, come back and try this thread again.
boringg 5mo ago
CNBC hard fumbled in that they didn't even understand what the offer was. The CEO put that on full display and embarrassed the hosts basic knowledge of finance. It was hard to watch.
- nkohari 5mo ago
  I have absolutely no clue how you could watch the interview and come away with this conclusion. The purpose of an interview is to ask Socratic questions to allow the guest to talk about something of which they have intimate knowledge. The CEO made it seem like he himself didn't know how the math for the offer worked, and even when presented multiple opportunities to correct that impression, he made no attempt to convince anyone otherwise.
  - applfanboysbgon 5mo ago
    > I have absolutely no clue how you could watch the interview and come away with this conclusion. The reason is pretty apparent. They are bagholders. People like this show up in every thread about Gamestop boasting about how amazing Cohen is in a weirdly personal manner, and have a very fantastical view of how things are going to go -- because their investment depends on it, and they built a literal cult around the idea that GME would make them rich, which necessitates viewing reality a little differently from the rest of us.
    - kentm 5mo ago
      For more information, see Dan Olsen's "This is Financial Advice." https://www.youtube.com/watch?v=5pYeoZaoWrA https://www.youtube.com/watch?v=5pYeoZaoWrA Its a few years old, but gives you some perspective on the weird cult that has been built around GME. Edit: Where Ryan Cohen comes in: https://youtu.be/5pYeoZaoWrA?t=6629 https://youtu.be/5pYeoZaoWrA?t=6629
  - ndiddy 5mo ago
    I imagine the actual reason why Cohen didn’t answer the question is that he would have to admit that if the combined entity issued enough shares to pay for the acquisition, it would substantially dilute existing shareholders.
matwood 5mo ago
It was a clown-show interview, but also likely on purpose from the CEO. The CEO does not like CNBC (their history of reporting on GME as a meme stock), and his schtick plays to retail investors. The problem is to get a deal like this done he needs to convince non-retail investors to come along. He also clearly didn't want to say 'dilution' when pressed about where the rest of the stock would come from.
noman-land 5mo ago
Guys, we have a web for a reason. For links! https://www.youtube.com/watch?v=Bmj2PaxX24E https://www.youtube.com/watch?v=Bmj2PaxX24E
- stickfigure 5mo ago
  Disagree https://www.youtube.com/watch?v=LTJvdGcb7Fs https://www.youtube.com/watch?v=LTJvdGcb7Fs
WarmWash 5mo ago
He didn't want to say the "D" word. (Dilute the religious share holders to have them finance the deal)
zdc1 5mo ago
Patrick Boyle on Finance has a Youtube video on the topic (https://www.youtube.com/watch?v=iBlu45HFruk https://www.youtube.com/watch?v=iBlu45HFruk). He basically explained that they simply can't afford the proposed transaction, so it was never going to actually happen.

by cmiles8 5mo ago

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.
- Scoundreller 5mo ago
  eBay does pay out a tiny dividend… would be better for everyone’s taxes if they did buybacks with it… If they leveraged up a bit more for even more buybacks, they wouldn’t be the first to do so.

romanhn 5mo ago

Just saw this for the first time. How someone can show up on a major network like this is beyond my understanding. Literally couldn't answer where the money would come from.

imglorp 5mo ago
Dilated pupils. Delayed responses. Inattentive gaze. Speaking nonsense. Drugs might explain many things.
- conorcleary 5mo ago
  He works his ass off. You obviously can't spot a bear trap :-) The lower range of $GME the past couple of years is nowhere near where the shorts are going to have to buy-in.
  - Topfi 5mo ago
    If diluting your stock is a magical infinite money glitch, why doesn't Cohen just buy Nvidia? Heck, I think GOOG is now the most valuable, why not both? Throw TSLA in while you are at it and AMZN, I am sure there is some synergistic potential.
    - conorcleary 5mo ago
      Remember the term vapourware?
      - Topfi 5mo ago
        Yes, what about it?
        conorcleary 5mo ago
        Alright I'll bite - go back to late 2020 and look at the stock market, then do some reading about the meme stock topic you wanna mock. Then measure your S&P 500 and valued stocks compared to who 'owns' them and who gets to value them. Then, if you're still with us, come back and try this thread again.

boringg 5mo ago

CNBC hard fumbled in that they didn't even understand what the offer was. The CEO put that on full display and embarrassed the hosts basic knowledge of finance. It was hard to watch.

nkohari 5mo ago
I have absolutely no clue how you could watch the interview and come away with this conclusion. The purpose of an interview is to ask Socratic questions to allow the guest to talk about something of which they have intimate knowledge. The CEO made it seem like he himself didn't know how the math for the offer worked, and even when presented multiple opportunities to correct that impression, he made no attempt to convince anyone otherwise.
- applfanboysbgon 5mo ago
  > I have absolutely no clue how you could watch the interview and come away with this conclusion. The reason is pretty apparent. They are bagholders. People like this show up in every thread about Gamestop boasting about how amazing Cohen is in a weirdly personal manner, and have a very fantastical view of how things are going to go -- because their investment depends on it, and they built a literal cult around the idea that GME would make them rich, which necessitates viewing reality a little differently from the rest of us.
  - kentm 5mo ago
    For more information, see Dan Olsen's "This is Financial Advice." https://www.youtube.com/watch?v=5pYeoZaoWrA https://www.youtube.com/watch?v=5pYeoZaoWrA Its a few years old, but gives you some perspective on the weird cult that has been built around GME. Edit: Where Ryan Cohen comes in: https://youtu.be/5pYeoZaoWrA?t=6629 https://youtu.be/5pYeoZaoWrA?t=6629
- ndiddy 5mo ago
  I imagine the actual reason why Cohen didn’t answer the question is that he would have to admit that if the combined entity issued enough shares to pay for the acquisition, it would substantially dilute existing shareholders.

matwood 5mo ago

It was a clown-show interview, but also likely on purpose from the CEO. The CEO does not like CNBC (their history of reporting on GME as a meme stock), and his schtick plays to retail investors. The problem is to get a deal like this done he needs to convince non-retail investors to come along. He also clearly didn't want to say 'dilution' when pressed about where the rest of the stock would come from.

noman-land 5mo ago

Guys, we have a web for a reason. For links! https://www.youtube.com/watch?v=Bmj2PaxX24E https://www.youtube.com/watch?v=Bmj2PaxX24E

stickfigure 5mo ago
Disagree https://www.youtube.com/watch?v=LTJvdGcb7Fs https://www.youtube.com/watch?v=LTJvdGcb7Fs

WarmWash 5mo ago

He didn't want to say the "D" word. (Dilute the religious share holders to have them finance the deal)

zdc1 5mo ago

Patrick Boyle on Finance has a Youtube video on the topic (https://www.youtube.com/watch?v=iBlu45HFruk https://www.youtube.com/watch?v=iBlu45HFruk). He basically explained that they simply can't afford the proposed transaction, so it was never going to actually happen.