alt Hacker NewsThe 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.
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I'm not sure I follow/buy the premise of moving second-hand sales to a physical building as beneficial to eBay.
If I'm looking for X, I'd much rather go to an online store, where I have access to several listings of X at varying prices and condition, vs. make a trip to a physical store, see if they have X, and hope that the condition and price matches my expectations.
Maybe if I'm not looking for X, and just want to browse a bunch of stuff (e.g. yardsale/flea market style), then a physical store could make sense.
But, to me, having this middle-man physical presence was already a problem, and eBay solved this.
I just don't feel like eBay needs GameStop.
Now, whether GameStop needs eBay is a different story. But GameStop is in trouble for two reasons:
1. Video games -- and therefore video game sales -- are moving to digital.
2. Physical stores are becoming a thing of the past for retail transactions.
eBay doesn't need GameStop's troubles.
TD didn't commit to $20B their letter only says they're "highly confident" they could raise that much. Very important distinction between the two.
If eBay thought having storefronts would be advantageous, they would have them. It doesn't make a lot of sense for eBay to merge with Gamestop only for the combined entity to decide that the most sensible first thing to do is close all the Gamestop locations.
The physical Gamestop locations are also horrifically overprovisioned to be an eBay storefront. Many companies have already experimented with things like "lockers" which seem to be successful enough to hang around, probably because the costs are low enough they don't need to do much to justify themselves and they don't need dedicated store fronts. If they want better assurance that the things being shipped are what the sellers claim they are a partnership with UPS or Fedex and their wide variety of existing storefronts that are already provisioned with everything you need to ship almost anything makes orders of magnitude more sense, and nobody has to "acquire" the other to make that work, without the square footage of a Gamestop location.