A friend of mine also pointed out and this made it click for me that it makes 100% sense, GameStop is setup as a legal pawnshop in every state. So a pawnshop buying out eBay makes insane sense.
This merger in theory could be good for both eBay and GameStop if they don't mess it up. Imagine being able to list your eBay items locally without having to have people needing to come to your house, or better yet, getting a cut of what you wanted up front since they're basically a pawn shop, and then they list it on eBay and turn a bit of a profit with a local pickup option available.
I could see this working out decently, assuming the CEO of GameStop doesn't mess it up completely.
It raised over a billion dollars of capital (i.e. issued shares in return for cash). It did not make a billion dollars in profit (and has never had a year when it did).
It doesn't though. eBay could easily set itself up as a legal pawnshop in every state if it wanted to. It doesn't because there's no advantage to doing so.
There are already third-party sellers in many areas who will take your physical merchandise and sell it on eBay in exchange for a cut. eBay doesn't need to enter that market, it's simply not profitable enough.
If you list an item, it strongly "suggests" a price. Sounds innocuous, right? However, when every seller knows they would be stupid to list a product for less than the suggested price, that means that eBay is enacting a collusion process on their sellers to regulate prices for products sold on their platform.
I don't think this is illegal in any way, but it is bad for the buyers as it decreases the chance that they will get lucky with a purchase and ensures that all purchasers on the platform spend as much as they can afford to spend.
Next, as a seller, eBay presents you with an option to "promote" your product, for a fairly significant percentage of eBay's suggested sell price. (Last time I tried to sell something, they wanted $9.99 to promote an item expected to sell for ~$150, for instance). If you do not "promote" your item, then it is thrown to the bottom of the listing and may be filtered out when purchasers sort by "price low to high" as they often do.
I chose not to promote my item as I was just getting rid of it, (brand new OEM toner for a printer that normally sells for $200) and it got almost no views and ended up selling for $40, of which ebay took $7.50 for their cut.
I checked the other solds for the same product and mine was the lowest sold by almost $100 all seemingly because I didn't pay the racketeer price upfront.
I didn't care about the money, I was just getting rid of it, and ebay punished me for not playing ball their way while also losing out on their profits just to make a point with me.
If you don't eBay the ebay way you will suffer for it.
Speaking of which, eBay has started changing the number of results based on your search filtering, preventing purchasers from finding the specific thing they are looking for in exchange for something that is often more expensive and not quite right.
Try it yourself. Search for something very specific and then change your filters and see the number of available items increases and decreases based on how you search. I honestly would not be surprised if they were hiding the unpromoted less expensive more accurate item you are searching for from you in the expectation of inducing you to buy the more expensive item in the process.
Why would eBay do this? They make more money. It's pure enshittification. They charge the sellers to promote. They set the prices. They charge an insane percentage, something like 15-20% of the final sell price to the sellers, and they have made the platform hostile to its original purpose of being a bazaar for ordinary people to sell their old stuff to people that might want them.
Of course, they are still seller hostile, they protect fraudsters who buy expensive items and claim they are fakes or broken and return bricks, and they have strongarmed their customers into arbitration agreements in an attempt to prevent anyone from suing them to stop their anti-consumer practices.
The only thing I can think of is Gamestop positioning to become a clearing house for fan swag or gaming items the way Woot is for Amazon overstock.
Umm, that’s been around since 1938, which is a few years before the era you’re talking about…
It didn't add enough value back then, but IMHO it does now. Selling on eBay is a massive hassle these days for a variety of reasons, and much less profitable for onesy-twosy transactions than it used to be.
If I could just drop off a bunch of stuff at my local GameStop and forget about it until the checks arrive in the mail... yeah, there's definitely a business model there.
Sort of wondering why nobody did this already. I know that the better charity shops do this with rare and unusual books/records. The UK equivalent CeX has an online offering through webuy.com, which appears to be a Chinese owned multinational.
I'm surprised nobody has really mentioned this in the thread. Does anybody remember the "trade in anything" day GameStop just had? https://www.usatoday.com/story/money/2025/12/08/gamestop-tra...
Obviously they're going to need to liquidate a lot of this stuff. It can be quite lucrative if done right. You're basically getting inventory for free.
If you read online employees have talked about how they donated it or threw it all out, presumably there is very little of that stuff left at this point (and probably nothing left of any real value).
Ex: https://www.reddit.com/r/GameStop/comments/1qceolz/what_did_...
IIRC, the short (borrowing stock, selling high, waiting for a downtrend, then buying low to pay back the borrowed stock buy an agreed date) was accelerating the fall of GameStop's stock price.
Then some Reddit knuckleheads noticed the hedge fund shorting GameStop was over-leveraged. They also found the deadline the hedge fund had to repay those shares to the bank.
The knuckleheads pumped the stock. Technical term: I like the stonk.
The knuckleheads then bought and held GameStop stonks. Institutional investors joined in. The hedge fund was legally obligated to pay any price to buy back the shares necessary to pay back the loan by the deadline. So the longer everyone else held on to the stonk, the more the hedge fund would be forced to pay. Squeezing the hedge fund in this way caused the stonks' price to temporarily skyrocket. Technical terms: hodl and rocket emoji
The original Reddit knuckleheads eventually stopped hodl'ing and sold high.
IIRC the hedge fund eventually went under.
Unfortunately, like all things, the knuckliest of Reddit heads would keep hodl'ing all the way back to the ground[1], hoping to cargo cult another squeeze by building wooden towers and dirt tarmacs to entice the sky rockets back. I'm not a stonk hodl'er, but I'd guess they are predominantly the ones who provided capital for Gamestop to buy Ebay. It's probably the most expensive and baroque way to fund a new consignment shop in your home town.
1: is there an emoji for a rocket crashing toward the ground? If not, there should be.
So far he's failed to improve Gamestop's core business, which is still in decline, even with the memestock cash gusher.
No one goes into Gamestop anymore, and they won't start because of eBay.
Must be why it's revenue is declining to it's historic 2006 level, because it's just too busy.
net sales 2016 $8.6b, 2025 $3.5b and still in decline
GameStop would probably be gone by now despite the meme stock if it wasn’t for trading card games and other similar collectibles, and eBay is very involved in that market.
Maybe eBay survives as an international site but even at that point, with $20B in debt this will just follow the regular PE playbook of shutting down after many layoffs and pivots
The entire concept of, "I have $1,000 in the bank, im going to buy a $10,000 company, but the debt will be on the companies name, not mine" needs to pass. Can you imagine if the mortgage was owned by our home, not ourselves. And we could stop paying it without any personal consequences
If you want to buy a $50B company, you should pay $50B (loans are fine, but not putting the new company in debt)
I don't really know what alternative there is to eBay as an 'everything shop'. I can get specific screws there, or diff fluid, or a customised motorhome name sticker, or an old baseball cap for an airshow I attended in 2008.
And if I bought the wrong diff fluid I can sell it.
The main value over Amazon, though, is that the search works.
Super true. You can actually search for the exact brand you want and not get a search result page full of brands XIAOLE, LLKAPOO, JEMROK, QPPNSS, VRINHH.
Also, I don't really know why, but I have much greater confidence on eBay that I'm not going to get something counterfeit or unsafe.
The last few times I've used EBay is to get parts for old garden tractors, and even for that I've found cheaper options with small retailers that specialize in that stuff. Most ebay shipping pushes the cost up too much, and with the small retailers usually I can get a bunch of things I need at the same shipping price.
To a large degree you can just stop paying your mortgage.
The biggest personal consequence is you will be evicted and lose both your place to live and any equity you built up.
The other main consequence is it will show up on your credit report for 7 years. Maybe some specific forms ask "have you ever been foreclosed on" in the future.
It's not experience massive growth but that's because it's a pretty mature market by this point. People who want to sell their stuff already use eBay. It works. It's mature.
Same for FAANG BS, ZIRP BS writing made by millions of bots online. Even before llms
CEO gets paid "only if GameStop achieves a market capitalization of $20 billion." Buying a $55bn company would certainly achieve that quickly. I'm not sure how they'd manage that (buy with what? Memes?), other than the should-be-illegal process of putting debt on the acquired company's balance sheet.
Otherwise take out a $20b loan and put it in the bank. Assets increase $20b, job done.
GME is ~12B, EBAY is ~46B (58 total) with net income of 0.4B and 2B (2.4 total). If he boosts profit by 1.2B then it's nearly a 50% increase and probably going to result in a more valuable combined company despite the debt.
The most beneficial thing is how even proposing this shifts peoples' perception of Gamestop from a beloved but struggling brick and mortar chain to a successful business
Sigh. The synergy argument, once again.
While historically most mergers don't work out particularly well, I'm absolutely sure this time will be different.
Thing is, GameStop is, well, for videogames and videogame paraphernalia. It's not a general store. Doing this would turn them into a thrift shop, not a pawn shop, as people are trying to offload their carpets, desks, etc - bulky stuff.
I don't think this makes sense.
This does make sense when you consider the collectable market, another domain I'm involved in. Trading card games, specifically pokemon, have exploded over the last 5 years. GameStop is making a killing off of buying, selling, and grading these cards. Ebay is the primary marketplace to buy and sell those cards. There's also tax free havens ("Vaults") offered by multiple companies, grading service passthroughs, and scalping offered through ebay too.
Viewed through the above lens, that's what's prompting this offer, I think.
FY2024: $718 million
FY2025: $1.06 billion
> Our offer is $125.00 per share, comprising 50% cash and 50% GameStop common stock
Even if you magically included all existing GameStop stock in the offer, it still would not comprise 50% of $55.5B.
EDIT: looks like it's not impossible and I misunderstood. It's a proposed change of leadership with a $25B injection of cash to sweeten the deal. GameStop would issue shares which would capture the original eBay value (since GameStop would own eBay after the trade), making that part a wash. At least assuming people owning eBay stock currently would value the combined company at at least the sum of their parts, which is a big if.
The issue is the non-cash portion of the offer. They claim that the remaining 27.5B is covered by GameStop stock. But that's more than double the market cap of GameStop.
A quick search for how leveraged acquisitions, stock-for-stock deals, financing commitments, or tender offers work would answer most of the objections.
Is it too much to ask the Hacker News commentariat to do one quick search before collectively declaring that something they don’t understand is impossible?
Are you new here?
(https://en.wikipedia.org/wiki/Barbarians_at_the_Gate)
This sort of acquisition is typically called an LBO or Leveraged Buy Out. The story gets into the details of key figures involved, including Henry Kravis who people today would better know for his private equity firm KKR.
Basic formula is raise cash using junk bonds, buy company, fix up company or kill off costs, use money company earns to pay debt, sell company. Since you have leveraged, your payout can be large.
It's a similar style financing activity to a house flipper. example: buy house for 1M, but pay $200K + 800K debt (mortgage). Fix up house, sell for $1.2M. Pay off $800K debt. You're left with $400K, or 100% return!
The CEO has a very specific deal where he gets paid significant compensation for specific valuations, which this is likely to achieve. That is value extraction at the cost of shareholders who will be on the hook for the leveraged loan and which will likely wipe them all out over time.
May 2020: $570.3 million
Jan 2026: $9.013 billion
Investors gave them this money; they sold additional stock to raise $3.47B in 2024, and another $4.2B of convertible debt in 2025.
Can people here really not keep their emotions in check enough to admit clearly obvious facts?
If Gamestop is the king, then reddit was the king-maker.
[0]: https://www.businessinsider.com/gamestop-ceos-awkward-interv...
The real economy seems to be burning but Wallstreet acts as if it didn't matter.
I am so painfully sick of this.
I didn't think so.
I wish them well!
This logic should apply to all corporate acquisitions. You want to buy another company? Use your own cash and equity. No need for us to be exposed to your risk.
This will also reduce the predatory private equity takeovers.
GameStop has physical stores so could be a place to send, collect from or even verify high value eBay items.
Along the way he says some ridiculous Trump stuff and wasted a bunch of time on NFTs but the eBay play seems interesting at least. It's one of the best internet soap operas to follow. For comparison AMC was put in the same "meme stock" bag at the time and you can see how they managed to ride the hype. So it's not just memes.
How the hell can GameStop buy eBay, this is insane.
Here local eBay "clones" aren't in a good place and have been left as ghost towns after Facebook Marketplace.
Yay.
Is this offer on a timer?
If this goes through, that will be the final straw that gets me to stop using eBay entirely. That would probably be for the best.
