alt Hacker News^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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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.
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.