Tradfi media (and my freakin' Twitter feed) went crazy over the hither-and-tither with the GameStop->eBay thing. I guess it SEOs well, and it was hot and sexy so everyone chimed in. (Here are the tabs I clicked and didn't read)
All for naught, because the bid was rejected and it's all a non-event nowAll for naught, because the bid was rejected and it's all a non-event now
While the WSJ editorial board called it "another sign that the credit mania continues," Matt Levine today gave us the more cynical view... it's more fun that way. #1488914
The problem with GameStop’s bid to buy eBay is that it’s half cash, half stock. GameStop, a company with $9 billion of cash and a stock market capitalization of about $10 billion, wants to pay $28 billion of cash and $28 billion of stock for eBay, a company with a stock market capitalization of about $48 billion.
Yup, that's the crux: can't buy stuff for money you don't have. #1485468
Oh, you naive summer child... WE HAVE FINANCIALIZATION NOW. Of course we can.Oh, you naive summer child... WE HAVE FINANCIALIZATION NOW. Of course we can.
The problem is that, in issuing $28 billion of stock to buy eBay, GameStop would essentially be issuing $28 billion of eBay stock. Current eBay shareholders would get shares of a combined GameStop/eBay that is almost all eBay. [...] Virtually all of the value in that company is eBay’s business, not GameStop’s.
The enterprise value of eBay is something like $51 billion, including debt. The enterprise value of GameStop, meanwhile, is less than $10 billion, because it has $9 billion of cash. (It has about $4.4 billion of debt, for an enterprise value of about $5.7 billion.)
"You can think of GameStop’s $10 billion market capitalization as being made up of (1) $5 billion of net cash plus (2) $5 billion of GameStop.""You can think of GameStop’s $10 billion market capitalization as being made up of (1) $5 billion of net cash plus (2) $5 billion of GameStop."
Nothing about the supposed... checks notes... 1BTC (!) GameStop has on its balance sheet... they sold their stash in March?! (Our resident stock expert @BlokchainB knew about that?? I'm the SN treasury company expert and somehow had overlooked this!)
Also, here's the bid from the point of view of eBay shareholders:
The meme-stock stuff is more implicit. We talked last week about Cohen listing his socks for sale on eBay to help finance the deal. You won’t get that sort of creative … financing? publicity stunt? … from a standalone eBay.
Of course, the Saylorboi-type Twitteratis are all out in storm, telling us how tradfi are afraid of the new meme-y outsider world and how this is an afront to progress, blah-blah-blah. God, let them all go away.
Now what?Now what?
One possibility is “lol never mind”: Nobody seemed to be all that serious about this takeover, we all had a good laugh, and now eBay has rejected it. GameStop bought almost 5% of eBay’s stock before announcing its proposal, and is probably sitting on a nine-figure profit at this point.
It was all just a pump-my-bag trolling event.
yesterday GameStop disclosed that it will ask its shareholders to authorize issuing up to another 1.5 billion shares, which would maybe (?) cover the eBay transaction. [6] “The Board is requesting the Authorized Shares Amendment to enable the Board to issue additional shares of common stock for general corporate purposes,” GameStop says, so I suppose eBay is not exactly top of mind.
Gotta get ready to run that share printer brrrrr..... #1485468
I'm somewhat agnostic about Trump. I know a lot of people really hate him and others really like him. The same can be said for Elon.
But one of the things they have in common is they both knowhow to use their megaphones to say things that move the market. I think they have both done this to great effect.
Perhaps it was something some people were already doing and I just wasn't paying attention. But, it seems like everyone has caught on to the idea now.
And so we live in a world were supposedly serious people say things like "Dodge is the best"/and " I will annihilate their civilization" and "my little company is going to buy eBay."
In none of these cases were the statements meant to convey an honest opinion, but rather they were said for the effect they might achieve somewhere else. Whoopie.
The everything-is-fake revolution is truly here
One aspect that has flown under the radar of this proposed deal is Game Stop stores are generally classified as "second hand dealers" in all states they operate in. That is legally the same classification as pawn shops (same regulation, just that game stop has a different business model).
The point being, is that this deal would transform eBay into basically being an online reseller + pawn shop network in 50 states.
There is something there that is interesting....Facebook Marketplace has basically devoured a huge part of eBay's business and the 'local first' aspect of Facebook Marketplace is the biggest thing that eBay is missing....
offer up
It was a fun headline
The funniest part of the GameStop eBay episode is that people debated it like it was an M and A transaction when it was really a market structure story.
GameStop was not offering operating leverage, strategic fit, or some hidden synergy. It was offering financial theater. Half cash and half stock only works when the stock is credible acquisition currency. In this case, the stock currency was basically a live sentiment instrument.
That is the core issue.
When your equity trades more like an attention derivative than a claim on durable cash flows, you can try to buy real businesses with it. But the seller is not stupid. eBay shareholders would have been exchanging ownership in an established platform for exposure to a meme premium they do not control and cannot underwrite.
So yes, on paper this looked absurd because GameStop does not have the money. But the more interesting layer is that modern markets sometimes let companies pretend they do. If your stock is inflated by narrative, community, scarcity, and optionality, you can briefly act richer than your fundamentals. That window is real. People have used it before. The problem is that it closes the second the target asks a basic question: what exactly am I being paid in That is why this was never really about eBay. It was about whether public market hype can be converted into private transactional reality.
Don't mention THE WAR.
Or The Greater Israel Project.
Keep chattering inanely about market rigging rentseeking speculative trivia nonsense- while children die and economies are strangled by the USA and its military industrial power projection.
Just keep on ignoring the genocide and land grabbing being enabled by the US government.
Call yourself a freedom loving, free-marketeer and free thinker Libertarian?
Hypocrite!
You are deluded if you think you can ignore the war crimes being committed in the name of the Petrodollar and US - Zionist imperialism.
https://m.stacker.news/141070
https://m.stacker.news/141512