Given that GameStop’s acquisition offer is half-stock, half-cash, they need to round up $27.75 billion; as they only had $9 billion in cash-on-hand as of January, most of that is the $20 billion in debt they’d be taking on.
Not only would the combined company have negative shareholder equity after the $20 billion loan (about -$10 billion, given the current $10 billion in shareholder equity between the two companies), but their combined annual net income is only about $2.5 billion (theoretically $4.5 billion after the proposed cost-cutting; likely less however, given that shrinking the eBay marketing department will likely reduce sales), so it’s unclear how they intend to pay it off, aside from issuing additional shares that would dilute the investment of the very shareholders they are trying to convince.
I’m guessing they’re also betting on a revamp / to be more competitive with Amazon and that their diamond hand fans (I don’t know how else to describe them) will switch over to ebay in droves, they would.
Yes that’s my guess as well: the prospect of stealing even a fraction of the business that Amazon does would probably make the whole thing worth it, and to that end, the main thing eBay brings to the table is the kind of pre-established brand recognition that money can’t buy.
Given that GameStop’s acquisition offer is half-stock, half-cash, they need to round up $27.75 billion; as they only had $9 billion in cash-on-hand as of January, most of that is the $20 billion in debt they’d be taking on.
They already have $5 billion in liabilities, so when also accounting for eBay’s $13.5 billion in liabilities, the combined company would have $38.5 billion in liabilities.
Not only would the combined company have negative shareholder equity after the $20 billion loan (about -$10 billion, given the current $10 billion in shareholder equity between the two companies), but their combined annual net income is only about $2.5 billion (theoretically $4.5 billion after the proposed cost-cutting; likely less however, given that shrinking the eBay marketing department will likely reduce sales), so it’s unclear how they intend to pay it off, aside from issuing additional shares that would dilute the investment of the very shareholders they are trying to convince.
I’m guessing they’re also betting on a revamp / to be more competitive with Amazon and that their diamond hand fans (I don’t know how else to describe them) will switch over to ebay in droves, they would.
Yes that’s my guess as well: the prospect of stealing even a fraction of the business that Amazon does would probably make the whole thing worth it, and to that end, the main thing eBay brings to the table is the kind of pre-established brand recognition that money can’t buy.
It’s because so many people scalp shit from GS to sell on eBay. They’re trying to figure out how to make money off of that.