^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.

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dagenix 2 days ago | parent | next [-]

My understanding is that existing Ebay shareholders would get half cash and half stock. In order to actually profit, those shareholders would need to believe that the combined company's stock could be sold off without taking a significant loss.

	▲	xp84 2 days ago \| parent [-]
		Yeah. On the individual level you can plan to sell immediately, but it sure wouldn't be pretty if a lot of the shareholders decided to do the same!

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tombert 2 days ago | parent | prev | next [-]

If this deal does eventually go through, then it might be a good time for someone to start working on a competitor to take over the online auction space.

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rtkwe 2 days ago | parent [-]

The biggest headache has always been fraud, eBay gets if from both sides and it's a pretty intractable problem to solve as the middle man.

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xp84 2 days ago | parent [-]

That's what those huge ~10% final value fees they charge are for. And other revenue such as sponsored listings (pay to boost your item in search results).

As long as they keep the fraud volume below like 5% of sales, I feel like it's just a numbers game, where they just need to get as much sales onto their platform as possible to give them enough operating margin to cover their costs (including fraud) and provide profit.

Admittely, I have no idea how well they're doing at that, I haven't looked at their financial statements or anything.

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rtkwe a day ago | parent [-]

Yeah my main point was it's a complete pain in the ass to deal with if you want to do it properly in a way that actually prevents fraud on either side. eBay has kind of just erred one side or the other for most of it's existence and right now the complaints are mostly from the seller side that I see.

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Scoundreller a day ago | parent [-]

I guess that’s why the Amazon model works: if you warehouse and deliver, then you cut out a lot of the fraud.

Sellers gotta deliver one way or another anyway so building out that logistics doesn’t add much friction to the whole process at scale. If things turnover quickly enough, the first mile benefits exceed the warehousing expense.

	▲	rtkwe 19 hours ago \| parent [-]
		Amazon's return policy is also getting pretty bad. There's a lot more third party sellers on the platform and occasionally users sent incorrect items get their refund refused because "item not returned" which is extremely frustrating when it happens. They're also kicking more people off for returning large numbers of items. And as to GME trying to shift to that they did attempt that already, it was one of RC's first attempts at pivoting back in 2022, they added something like a million square feet of warehouse and fulfillment and it didn't really work.

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a day ago | parent | prev [-]

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