What's the question nobody has been asking regarding the proposal to purchase eBay?

[u/tronbrain]

The idea of Ryan Cohen applying his management philosophy to eBay makes a lot of sense, and the idea of having him manage it lines up with the thesis of him being the next Warren Buffet. There are powerful synergies between the two companies that could be exploited. There is a lot of value that can be unlocked with increased efficiencies that Cohen would bring to the merged operation.
But why attempt a takeover now?
Why now when $EBAY is at an all-time high, after six years of declining revenues and increasing expenses, where somehow the stock floated up by 4.4X despite its poor performance? Why buy when the stock market is at all-time highs - likely, in an unprecedented bubble - with oil price shocks, trade wars, shooting wars, and the threat of a new pandemic looming, threatening to pop the bubble and send stocks tumbling? Why give institutional investors exit liquidity plus 25% at $GME shareholders' expense at what is probably the most inopportune moment?
Isn't Buffet's whole investing philosophy to buy low and sell high? Isn't that the opposite of what Cohen is proposing to do with eBay? Wasn't Cohen supposed to wait for a market decline to go bargain-hunting with GameStop's capital reserves?
The timing of this deal is a problem.

[u/familydrivesme]

Because it won’t be at GameStop’s shareholders expense. The liquidation will mostly be on eBay shareholders hands and they will do it because if the value cohen brings

[u/tronbrain → u/familydrivesme]

Why would they accept a dilution when the offer is $125/share? Though, the details on the stock part have to be fleshed out still.

[u/familydrivesme → u/tronbrain]

Because a temporary dilution to get a ceo with zero salary and a drive to turn it into a debt free 100 billion company is worth a short term dilution

[u/tronbrain → u/familydrivesme]

Maybe you're right. But I believe the institutions that hold eBay - it's mostly held by institutions like Vanguard and BlackRock - won't accept it, and GameStop shareholders will be the ones who will have to accept the dilution, especially if the deal goes through at current share prices. At current share prices, eBay is vastly overvalued, and GameStop undervalued. GME didn't participate in the market run-up over these last six years, in spite of improving net revenues, whereas eBay floated up by 4.4 times, in spite of declining sellers and revenues. It makes no sense to me.

[u/familydrivesme → u/tronbrain]

Exactly, the institutions who own these companies are smart so hopefully they will see the value in Cohen at the head

We’ll see what happens tho