Key insights
- The post discusses the hypothetical acquisition of eBay by GameStop, highlighting the significant difference in market capitalization between the two companies. It questions how GameStop could finance such a deal, considering its current assets and debt. Potential funding methods like debt financing or equity dilution are mentioned, but the overall tone suggests skepticism about the feasibility of the acquisition. This scenario is unlikely to influence the broader US equity market.
This is a genuine question. Sorry if the answer is obvious. EBAY made $2B+ on profit last year. They're current trading at around 45-50B market cap. How does GME make them a legitimate offer? I know this sort of thing must be possible because the recent Paramount/WB deal immediately comes to mind. I don't know the specifics of that deal but I'd assume it's a somewhat similar situation, in that one company is trying to buy one that's significantly larger.
Where does GME get the money to make an offer that ebay shareholders would want to accept? Will someone lend them the money? Dilution?
Please explain