Views from the 12th floor
VIEWS FROM THE 12TH FLOOR
Thompson Street. Three stories that caught my eye this week.
Twelfth floor on Thompson, Tuesday morning. Outside the window, the cast-iron facades are doing exactly what they’ve been doing since the 1880s, looking very expensive while pretending to be industrial. Some stories I noticed.
eBay tells Gamestop: Sorry luv, you’re just not my type
eBay’s board, chaired by Paul Pressler, formally rejected Ryan Cohen’s $56 billion takeover bid on May 12, calling it “neither credible nor attractive.” The board cited financing uncertainty, operational risks, GameStop’s governance, executive incentives, and the potential drag on eBay’s long-term growth. In fairness, “neither credible nor attractive” could also be the opening line of every Tinder rejection ever written, which makes this rare among M&A press releases, it has a punchline built in.
The TD Securities $20 billion financing commitment that propped up Cohen’s bid was contingent on the combined company maintaining an investment-grade rating from at least two of the top three agencies. Moody’s had already called the proposed deal credit-negative. The numbers, as the kids say, weren’t mathing.
As we covered a fortnight ago in The Teenager Theory, the value of Cohen’s bid was never going to be the deal itself. It was the mirror. eBay had to look at itself and ask whether all the right strategy, Depop, Goldin, PSA, Authenticity Guarantee, TCGPlayer, was actually being executed with the urgency the strategy deserves. The bid did its job. The mirror got held up. The teenager looked.
The question for next quarter isn’t whether eBay rejected the offer. It’s whether the teenager goes back to ironing its shirt at the same pace as before, or whether something quietly changes in the strategy meetings on Hamilton Avenue. I have my suspicions. Watch the next earnings call for the pace, not the numbers.
One small win for the marketplace class. Possibly.
