alt Hacker NewsI really thought it was going to be the other way around.
I am quite confident that if GameStop bought eBay, they would ruin it in the same way that K-Mart buying Sears ruined that company.
I could be wrong, I'm not a business person, but it seems kind of obvious that a company like GameStop, whose current existence appears to be due to a weird short squeeze anomaly, is not a sustainable business.
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Gamestop turning into an eBay storefront makes a lot of sense to me and this seemed to be a very rational step to take when the short squeeze anomaly left them with billions in the bank and a business model that no longer makes very much sense with physical game sales being eaten by digital-only sales along with the potential decline of the console.
They already have the position of used buying and sales, extending that into in store receiving and listing of items on eBay makes sense. eBay being in decline as well.
>K-Mart buying Sears ruined that company
Both were quite dead by the time that happened.
>> whose current existence appears to be due to a weird short squeeze anomaly, is not a sustainable business.
I remember working in a CD Warehouse in the early aughts. Our store was next door to a Game Stop. The woman who worked at the Game Stop would come over and chat music with me when her store was slow. We used to joke about how both of our industries are seemingly dying a slow death. Console and game prices were going through the roof at the time. Compact Discs were being replaced by downloadable music. A few months before I quit, we finally started reselling DVD's to buoy the CD reselling part of the store.
As it turns out, the gaming industry outlasted the CD reselling business by quite a bit. lol
The context this comment misses is Gamestop's secret weapon is their CEO Ryan Cohen who has been sitting around the hoop trying to figure out how to leverage Gamestop's fundraising capabilities to do something big
Couple of highlights on Ryan
- Built and sold Chewy from a startup to the largest ecomm acq of all time - Became #1 individual shareholder of Apple early on - Bought a 10% share of Gamespot in 2020 becoming largest personal shareholder - Took over as CEO after being a proactive board member, works for no salary
The TD Bank securities commitment of 20B to finance the deal and GameStop having a market cap far below the acquisition cost suggests that buying eBay would’ve been very problematic and risky for investors. But comparing it to K mart buying sears isn’t really accurate to me.
Like yeah, GameStop clearly fits into the death of retail, and acquiring eBay does increase their market visibility or presence. Beyond that, what ebay/GS could’ve gained is way different and arguably more substantial than what acquiring Sears did for either company involved. Atleast here, one operates storefronts for second hand transactions and the other expressly doesn’t. There is definitely money in that.