Taking a $20b loan from TD Bank + sitting on $9b CASH + GameStop stock for the rest. They’ve made an interesting proposal around using 1600 GameStop locations for fulfilment. Smart if they can make it work.

Update: Numbers still don’t add to $55b - I think there’s a $14b shortfall. Not sure about how they are planning to fund that.

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bhouston 3 hours ago | parent | next [-]

> They’ve made an interesting proposal around using 1600 GameStop locations for fulfilment.

Is that really an advantage? Fulfilment is always handled by a lot of places for the big e-retailers for returns, which is similar to what eBay needs for sellers.

How much does Staples charge for its Amazon return fulfillment where you don't even need to wrap up the item?

I question whether it is advantageous to use GameStop stores for this or just to piggy back on what Staples is already offering to Amazon and others for their returns? Fulfilling returns for Amazon isn't significantly different to shipping eBay orders.

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noitpmeder 3 hours ago | parent | next [-]

My kneejerk is that most consumers these days expect delivery for items purchased online, and allowing them to pick up their items at a brick and mortar probably isn't the issue.

Now, dropping off items you're selling? That probably removes a decent hurdle for many first-time/one-time users who aren't familiar with shipping (what box/label/insurance/padding/...).

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bhouston 2 hours ago | parent | next [-]

> My kneejerk is that most consumers these days expect delivery for items purchased online

100%.

> Now, dropping off items you're selling?

This is what Staples is offering to Amazon but for returns - quite similar. And they could offer them to eBay as well I am sure. You do not need your own chain of brick and mortar stores to do this and I am sure the cost per drop off would be cheaper with Staples than your own chain that only serves you.

GameStop is a game of constant pivots that sound good to its meme-believers that do not really work in the real-world.

	▲	happyopossum an hour ago \| parent [-]
		> This is what Staples is offering to Amazon but for returns Yes, and usps stores and Whole Foods do that for Amazon in the US as well. The difference is that each of those items don’t need to be individually packaged and shipped to unique locations. My local USPS put all the returns for the day in a giant bin and an Amazon driver picks them up. I think the cost of labor and liability involved in having a local retail worker wrap, label, and ship every package would be an order of magnitude higher than shipping alone and destroy any value in offering it.

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SkyeCA 2 hours ago | parent | prev | next [-]

> Now, dropping off items you're selling?

A place that you could take items and have them packed and shipped for you would remove an enormous hurdle for new eBay sellers. It's easily the most annoying part of the entire process.

Hell, maybe they could even list items for people? Like a massive digital pawn shop.

I could see this really working out for them if they do it right.

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Pikamander2 2 hours ago | parent | prev [-]

Can confirm. The main reason why I don't sell stuff on eBay more is because of the high shipping costs and frequent scams.

Facebook Markerplace has issues of its own, but if you agree to meet up at a safe public location to buy/sell the item in person, then it mostly alleviates those two issues aside from the small chance of receiving counterfeit bills.

If Gamestop and eBay merge, then they could (potentially) offer a better deal to buyers/sellers by either buying certain items directly, shipping them at lower costs, or having an employee "verify" the item before it ships so that the seller receives better protections.

That's assuming that this is truly an ambitious merger rather than just being some kind of exit liquidity scam that gives Ryan Cohen a golden parachute right before he peaces out.

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colechristensen 7 minutes ago | parent | prev [-]

>Is that really an advantage? Fulfilment is always handled by a lot of places for the big e-retailers for returns, which is similar to what eBay needs for sellers.

I think the advantage is going to be "bring your junk to GameStop and an employee will put it up for sale and handle shipping"

You'd get considerably more trust buying something on ebay that at least some teenager looked at and verified was real and powered on, etc.

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andruby 2 hours ago | parent | prev | next [-]

A company doesn't need $55bn to buy a $55bn company. They can issue new GME shares and exchange $EBAY for $GME. These are sometimes called "stock-for-stock" transactions

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shmatt 2 hours ago | parent [-]

Except a sudden dilution usually tanks the stock by the exact % its diluting

So GME dilutes by 20%, stock price immediately goes down by 20%. its not some infinite money hack

	▲	sokoloff 18 minutes ago \| parent [-]
		Except in this case, the company also now owns EBay with a market cap of around $44B before the takeover bid was announced. I don’t think GP was claiming it was an infinite money hack at all.

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weard_beard 2 hours ago | parent | prev [-]

GameStop has a standing approved agreement to issue up to a billion new shares. If you read the offer you will see it is 50% financed by GameStop stock.

They threw him a hardball today in his cnbc interview on this topic. $GME stock value would plummet short term, but the combined company would revalue much higher.

Current Gamestop shareholders would be diluted. They would own, proportionally, a much small slice of the combined company, but at a higher price point.

The framing of this as, "Ryan Cohen is diluting Gamestop shareholders in order to meet the terms of his enormous pay package" is disingenuous though, as his pay package is all stock. He's diluting himself too. He obviously has faith that, long term, the value of the combined company can substantially grow.

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robotresearcher an hour ago | parent | next [-]

If his choice is between not getting paid due to not meeting targets, and getting paid in diluted stock, then it’s straightforward enough.

	▲	weard_beard 29 minutes ago \| parent [-]
		He has a massive stake in Gamestop outside of this pay package. The loss from diluting his massive accumulated position is not worth the bonus unless he thinks the price will recover long term.

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3form an hour ago | parent | prev [-]

>He obviously has faith that, long term, the value of the combined company can substantially grow.

Depends how much of them he has before and he will after, it might still be worth diluting if difference is vast.

Also, why long term if short term could also do?

	▲	weard_beard an hour ago \| parent [-]
		My take? The strategy is like a contractor fixing up houses. GameStop was the crappiest house on the block. He’s fixed it up and is using it as collateral to take out a loan and buy the dilapidated mansion next door (eBay). He’ll keep going until he’s gentrified the whole neighborhood using the value of the current business as collateral to buy the next. He wants to sell only when the value of the entire gentrified neighborhood reflects market rate for the work he's put in.