[cmiles8]

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.

[romanhn]

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]

Dilated pupils. Delayed responses. Inattentive gaze. Speaking nonsense.

Drugs might explain many things.

[conorcleary]

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]

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]

Remember the term vapourware?

[Topfi]

Yes, what about it?

[noelsusman]

...ya'll are still doing this?

[mrguyorama]

It's a literal cult. They have to believe there's some magic future where they magically end up controlling the world still, because otherwise they've been pumped for money they couldn't even afford.

[conorcleary]

Doing things the hard/proper way takes time and patience.

[Scoundreller]

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.

[stephen_g]

> 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]

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.

[Normal_gaussian]

https://www.google.com/finance/beta/quote/EBAY:NASDAQ?window...

eBay is doing fine.

[Scoundreller]

$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.

[zdc1]

Patrick Boyle on Finance has a Youtube video on the topic (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.

[WarmWash]

He didn't want to say the "D" word.

(Dilute the religious share holders to have them finance the deal)

[noman-land]

Guys, we have a web for a reason. For links!

https://www.youtube.com/watch?v=Bmj2PaxX24E

[stickfigure]

Disagree https://www.youtube.com/watch?v=LTJvdGcb7Fs

[matwood]

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.

[boringg]

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]

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.

[flyingcircus3]

Yes you do. He came away with that conclusion because he entered with that conclusion. When you're already radicalized to a specific outcome, you lose the ability to perform the process of elimination.

[nkohari]

In my defense, I had entirely forgotten GME is/was a meme stock. It's been many years since I spent brain cycles thinking about WSB.

[ndiddy]

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.

[nkohari]

I agree, but he had to know he'd be asked the question, right? And he had to know that staring blankly and mumbling about the offer being on the website wouldn't suffice as an explanation. It's just mind-boggling behavior from the CEO of a public company.

[applfanboysbgon]

> 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]

For more information, see Dan Olsen's "This is Financial Advice." 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

[mh-]

Can you explain your thought process here? Perhaps we're "embarrassing my basic knowledge of finance", but I wasn't able to follow his math either.

[rtkwe]

The math doesn't actually math. Even if you're not discounting the cash on hand from GME's value all of GME's market value, plus their cash on hand, plus the "highly confident" $20B still doesn't add up to the take over value in Cohen's letter.

[mh-]

I know it doesn't. But I felt like parent commenter was offering to explain what CNBC and the rest of us didn't understand, that he does.

TLDR: half cash, half stock.

[rtkwe]

i t ' s o n t h e w e b s i t e . . .

What a bizarre interview that was. The least damaging interpretation is he was intentionally being bad to spite CNBC in a basically (though their explanation doesn't include this) childish fit for earlier bad coverage of GME.