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Bloomberg Tech is live from the heart of

Silicon Valley with Ed Lello in San

Francisco.

This is Bloomberg Tech. Coming up, US

equity markets drop after TSMC's

results, topping expectations, but also

spending more to meet AI related demand,

including a bigger commitment to its US

buildout. Plus, Seronic makes a $3.2

billion bet on Texas. We speak with the

CEO of the Autonomous Maritime Drone

Company and Texas Governor, Greg Abbott.

And later this hour, Ryan Cohen, CEO of

GameStop, joins us to discuss the

company's bid for eBay. the future of

gaming and a lot more. Chip makers are

weighing on technology stocks, stocks

broadly. The concern is AI spending. The

catalyst TSMC's quarter quarterly

results. They actually raised the sales

outlook beat across the board and then

said capital expenditures would be

higher not just this year but for three

years. Now the market's kind of

recalculating and saying, are we worried

about how much higher spending is going

to get and how is it justifying current

valuations? These are what the markets

look like right now under performance in

chip stocks. For what it's worth, TSMC

uh sees US listed shares, the ADRs,

they've kind of offsession lows, but we

are marketkedly no lower. That takes us

to today's big number, $265

billion. That's the total value of

TSMC's planned US investment after the

chipmaker added another $100 billion for

just four new semiconductor fabs.

Bloomberg senior tech editor Mike

Shepard has more. Um $und00 billion is a

lot more but it's for just four fabs.

That's the reality of the economics of

building out infrastructure. Uh what do

we need to know about this? Well, Ed,

this is a number that has been in

circulation since the beginning of the

year when TSMC indicated to the US that

it would be building those four

additional plants, bringing the total

plan for Arizona to 10 fabs plus two

packaging plants over an indetermined

amount of time. It takes a long time to

construct these facilities and really uh

an even longer time to actually start

production and delivering. They began

production at the four nanometer process

level back in 2024 and the three

nanometer process level at a second fab

outside Phoenix is only going to be

ready next year. So we are talking Ed in

more geological terms in terms of time

than uh something immediate and around

the corner. Um but it is a huge

commitment and it was driven in part Ed

by the Trump administration's pressure

on Taiwan with tariffs. At the beginning

of last year, TSMC had pledged to

increase a $65 billion investment agreed

to under President Joe Biden to $165

billion soon after Trump took office.

But that clearly wasn't enough. And we

saw them step forward with this

commitment under the pressure of tariffs

to add another hundred billion to it.

That's the bit I'm kind of interested

in. Right? There's a lot of uh focus on

bigger numbers. Sometimes numbers get

bigger because the environment is more

expensive. Right? inflation on the

labor, construction, materials side. Did

TSMC tell us anything more about why

they they're bullish on America?

Well, in part because if you uh look

back at uh CEO CC Wayi's comments back

in June, he is saying that it will take

years to meet all the demand for chips

that his company makes from US

customers. And that's really true across

the board. You also heard that in your

conversations with the CEO of SKH Heinik

saying that look the memory shortage is

real and it will be here through 2030

and that is because of the unprecedented

demand created by the AI boom. There is

so much need for chips and processors to

to go into all those uh AI uh uh data

centers being built across the US and

elsewhere in the world. And that's on

top of already existing demand for other

consumer devices and products. And all

of those chips need to make made

someplace. TSMC is looking to diversify

geographically out of Taiwan where it

principally makes um most of its

products and it wants to put more of it

here in the US in part as a hedge

geopolitically. In part also because

yes, it does need to serve the US

customer base more and also uh recognize

that the political pressure here in

Washington to expand and invest not only

in Taiwan but other major economies is

very strong. Ed Bloomberg's Mike

Shepard. Thank you very much. Let's get

more on TSMC's results and bring in

Tammy Chu Baronburgg's head of tech

equity research. TSMC hiked its sales

outlook but also boosted its spending

plans. for you Tammy which was the more

important metric

>> so um from a semi-equipment company

perspective in my view both are

important because reason being is

normally a good idea to say

semi-equipment companies will benefit

from the strong capex of TSMC where they

raised already twice in this year but at

the same time we do want to see that

TSMC is doing well for their own

business to be able to support the

higher capex spending level for longer

ts SNC court today that the AI industry

is new and demand will go all the way

into 2029 2030 which is a positive sign

uh in my view for the semi-equipment

industry.

>> Tammy, we're going to get to ASML in

just a moment. pretty much the critical

key uh chip uh equipment name. But the

the reaction of US equity markets to

TSMC saying not just this year spending

will be higher but over a number of

years it's kind of raised the

expectation for the capex environment

overall. In the near term stocks are

down because of that. What why is that a

negative in the first instance?

uh in our view the semi-equipment and

also TSMC share price has been down

after that massive announcement despite

the revenue upgrade etc because of they

all did well over the past two months

and uh the investor expectation has been

increasing dramatically so in our view

it just a take a brief and also at the

same time the uh news flow from the

memory sector has been a bit volatile

from a share price perspective which is

also adding pressure to the very popular

AI trade. So, in our view, it would just

be a short-term profit taking instead of

anything fundamentally went wrong.

>> Let's go to ASML. We didn't have a show

on Tuesday and Wednesday of this week

because of Fed Chair Walsh's testimony.

But ASML also lifted its annual sales

forecast for the second time this year

and said it is going to expand its own

capacity. and like how that manifests is

a greater number of units on the low NA

and high NA side. Just your your overall

reaction to what ASML said.

>> ASML's earning yesterday has been uh

amazing in terms of how they revised up

the fullear guidance for the second time

this year as you suggested. Besides the

revenue, I would point out ASMO also

revised up the gross margin expectation

for this year from mid.52% to mid.55%.

which all suggesting that ASML is seeing

incremental demand coming from their

customers and customer just need more

capacity over time. So therefore from my

perspective I believe that ASMR has been

showing based on their numbers that the

whole AI investment capex expansion

capacity addition is not coming to an

end at any time and the share price move

of yesterday from ASML side is very

similar to the logic of TSMC. The share

price has done really well over the past

3 months. Expectation has been high. So

we are taking a little pause but we do

believe that the results yesterday of

ASML has been very strong and showing

the uh level of customer spending is

only going up.

>> ASML is in a in a position where there's

essentially a a backlog, right? Orders

are queued up um all the way to 2028.

We've spent a lot of time uh recently on

the show thinking in the context of

memory chips about the historic boom and

bus cycles, the cyclical nature of

those. How does ASML manage that on on

its critical machines across logic and

memory, right? You know, it has a

backlog. It wants to increase capacity,

but in the end, what happens if the

demand tapers off or falls away?

So from ASMR perspective they are

normally very very cautious when they

are adding capacity or committing to

adding more capacity because none of the

equipment company want to drag on those

empty capacity through the downturn as

you suggested. So we believe that ASML

has been talking with customers on the

very frequent basis to understand what's

the real demand of the customers and try

to understand what's the end market

driver for those before they build

capacity and of course they have to

balance the uh demand from both logic

and memory customers and we do believe

that at this point of time they are

treating both of the sector as super

growthy

>> part of the cycle. Therefore they have

been building for both of them instead

of you know try to select which customer

they want to serve first. We are in the

environment that every every component

in this AI supply chain is under

shortage. So therefore we believe that

ASML has been speaking to customer

understand the real requirement and

building for both of the sectors in

order to fulfill more incremental demand

in the coming years.

We were just showing ASML's top

customers, unsurprisingly, TSMC,

Samsung, Intel, but I was looking at the

2Q net system sales by region as well,

right? Most of this equipment is going

to South Korea, then Taiwan, 30% to

Taiwan, but only 9% to the US. We

started this show talking about TSMC's

increased commitment to the United

States. Do you expect over time more

ASML equipment to come here to America?

Yes, because their regional sales on a

quarterly basis can be lumpy depending

on which customer will receive more

shipment in this year with Samsung

further expanding their fabs in the US

with TSMC expanding further in the US

with incremental commitment. We do

believe that US sales will increase on

the quarterly basis going forward but

the pattern can be lumpy which doesn't

really suggest that TSMC or other

players is pausing their investment in

the US. just lumpiness of the factor of

the um equipment given that ASML's

equipment is sold for more than 200

million per equipment. So therefore, who

receives what really moves the quarterly

trend.

>> Tammy Chu Baronberg's head of tech

research, great to have you back on

Bloomberg Tech. Thank you very much. As

the AI world gears up for a big earning

season, one of the industry's key

figures was spotted enjoying pork

skewers in Tokyo, Nvidia CEO Jensen Wong

enjoyed the finger food alongside

Japanese suppliers to court their

support for the AI supply chain. Those

present included executives of companies

like Kosha and Tokyo Electron, both of

which supply essential components for

Nvidia's AI systems. Not only that,

Japan is planning to purchase 27,500

next generation Reuben chips to build an

AI for robots. Okay, coming up, Seronic

makes a $3.2 billion bet on Texas. We

speak with Dino Mukas, Seronic CEO, and

Texas Governor Greg Abbott. This is

Bloomberg Tech.

Texas is quickly becoming the epicenter

of America's next industrial buildout.

From AI data centers and semiconductor

fabs to defense technology. Now,

autonomous ship builder Seronic is

making its own major bet on the state.

The company's announced a $3.2 $.2

billion investment building a next-gen

shipyard at the port of Brownsville,

manufacturing medium to largeclass

autonomous surface vessels. Joining us

now for an exclusive conversation are

Seronic CEO Dino Marukus and Texas

Governor Greg Abbott alongside our

Bloomberg, Texas Bureau Chief Julie

Fine. Governor Abbott, good morning to

you from San Francisco. If if we could,

I I'd like to start with a a sort of

operational update, please, on the

flooding situation in your state. I know

it's something that you want to

communicate on.

>> Sure. Listen, well, thank you for

offering that up. Uh we uh we've been

following all day yesterday, all last

night, and today. Uh the massive

flooding going on in central and south

Texas. Uh it's the same area uh where

there we had the the massive Fourth of

July flooding last year. The difference

this year is we're actually getting more

rain over the past the past 24 hours and

over the next 24 hours than we got last

year. Uh there overnight uh there was

one life lost. Uh we are continuing to

surge resources. Uh we've made almost 80

rescues already. I will be leaving here

after this interview to go focus on our

current response uh in regions ranging

from uh the Kurville area all the way

down to Ualdi to Del Rio to Laredo where

we expect continued flooding. I just

want to make sure that all Texans know

uh that we have more than 1,300 Texas

personnel, uh the National Guard, Texas

Department of Public Safety. We have all

resources, boats, helicopters available

to make sure we will be doing everything

possible to save human life.

>> Governor Abbott, I just want to follow

on that briefly. As you remember, just a

horrible time last year when there was

that flooding in the same area. your

advice to anybody in the area that sees

this water that is concerned, what

should they do and where should they go?

>> So, great great question and and you all

are one of the best communicators to the

general public that we can have out

there with the news media sharing this

what I'm about to tell you and that is

there there are rapidly rising rivers

that will continue to rise through the

remainder of today and tomorrow. If if

if you do not need to be out, don't go

out. Uh we have uh one one leading

reason why people may lose their life in

rising waters like this is because

people drive into waterways and get

swept away. There's an old saying, uh

turn around, don't drown. And that

applies here. Second, uh because rivers

are rising so rapidly, uh if you are

near a river, try to get away from that

river so you can protect your own life.

Each individual in the state of Texas

has the full capability of protecting

and saving their own life right now by

staying away from the rising rivers and

not driving into it. Uh Governor Abbott,

thank you very much for that. As a

reminder to Bloom Techch audience, um

Seronic, uh a defense tech startup

focused on autonomous maritime drones,

investing $3.2 billion in the state of

Texas, a facility at the port of

Brownsville. Dino Marukus, uh, Seronic

CEO. Welcome back to Bloomberg Tech. The

question we get most often is often the

simple one. Why Texas? What did Texas do

to win your business?

And before I even talk about that, I

just want to say our thoughts and

prayers go out to everybody involved in

the flooding. Sonic keeps that very,

very front of mind and we're very proud

to call Texas home and invest in the

community here. So, Governor, if there's

anything that we can do to support,

please let us know.

>> Sure. Thank you.

>> Um, Texas, Texas is a great state. I

mean, the leadership and the and the

partners with the governor.

>> Look, we're building a next generation

shipyard. We're going to go and build

the most advanced, most efficient,

highest throughput shipyard, not only in

the country, but in the world. So, when

you're look when you're doing that,

you're looking for land availability.

You're looking for deep water access.

Those things are kind of binary. You

either have them or you don't. What

really tipped the scales was the

workforce, the people down in

Brownsville that we're going to build

this company and this project around.

And then the partnership with the state

and local government. It's the

governor's leadership and support, the

partnership with the state, Cameron

County, and the city and the port of

Brownsville that helped bring this

generational project to life.

>> Do you know Brownsville close proximity

to SpaceX? So that was interesting that

the workforce was was was the tipping

point. How competitive is it in in your

industry right now in hiring the best

people across lots of different

disciplines?

I

>> I think what you're seeing it's actually

more collaborative than it's

competitive. You're you're building up

industry. You're building up

infrastructure. You're investing in the

community. When you look at what we're

going to do in Brownsville, we're going

to invest billions of dollars, not just

into infrastructure, but into the local

region. We're going to create 10,000

jobs, and we're going to create $ 160

billion of economic impact in the

region. And that's just over the next 10

years, right? With companies like SpaceX

and others doing that, it creates an

entire ecosystem um not only in that

part of the state, but in the entire

state. Governor Abbott, we just heard

Dino talk about the workforce. Again,

that's 10,000 jobs. So, I'd like to hear

about the plans on how you plan to

develop that workforce to make sure

there are enough people available.

>> I'll tell you this, and that is Texas

ranks number one in the United States

for having the best workforce. Texas

ranks number one for adding more new

jobs than any other state. And there's

reasons for that and that is because we

we work more than you know the state to

make sure we have the the best trained

and qualified workforce. We have these

massive education programs across the

state. One is through the Texas State

Technical College. Uh two is through our

uh two-year colleges, but three is

through our universities. uh and we we

focus our education in Texas on real

life job skills uh that will ensure that

when a student graduates or completes

the course study there, they're going to

be ready to go straight into the

workforce. And we uh talked to Dino, we

we talked to Seronic about what our

capabilities are to make sure that we

would be able to develop uh the

workforce they need. It's exactly what

Elon Musk found with regard to SpaceX.

It's what other companies that are

coming into the status of Texas are

realizing. I talk to these CEOs all the

time that are coming to the state to to

the state of Texas and they tell me the

the leading reason why they're coming to

the state is because we do have uh that

pipeline of well-trained workforce and

we will be able to deliver it for

Seronic just like we have been for all

these other companies where Texas now is

home to more Fortune 500 company

headquarters than any other state

because in part of the workforce and

supply that we have.

Governor Abbott, when you look down the

road five years, what does the Rio Grand

Valley look like with this addition?

>> So, it has changed dramatically. You're

familiar with it. Maybe many Americans

watching this show may not be familiar

with it, but uh listen, the real Grand

Valley has historically been an

agricultural region and things like

that. But when you look at some changes

taking place, you know, you mentioned

one obviously with Starbase down there

and Cameron County, which is near the

Brownsville area with Seronic, which is

going to be near the Brownsville area.

Uh the the is a a massive explosion of

economic activity. Uh and because of

that, kind of going back to the

education component, what our

universities are doing, our universities

are establishing uh campuses and

expanding campuses in those regions to

make sure that we will be educating

students not not just to be able to go

to work for Seronic uh but also to fill

the other education needs in the entire

area. But going back now, the the

Cameron County area where this project

is going to be located is going to be

one of the fastest growing regions in

the entire state. So, we're we're

building out uh transportation

facilities, other facilities to make

sure this is going to be a thriving

community, but it also shows how Texas

is the most diversified economy in the

United States. Not not just with regard

to different business sectors, but

geographically in the state. Obviously,

we have the the booming uh Dallas and

Austin and Houston areas, but now we

have the the booming real grand area.

and and so our state is absolutely

booming and we cannot be more proud to

have Seronic down there and the jobs

they're providing. So again, this real

quick number uh over the over the course

of the coming years, Seronica is going

to be adding uh more than or up to at

least 10,000 new jobs at $75,000

uh per job at least. When you put it all

together, they're going to be in

injecting $750 million in paychecks for

our fellow Texans. That's going to make

a massive difference in our state.

>> Do you know we're going to put up,

>> do you know, let let me just jump in

because there's another big moment this

week for you. Sentcom sharing this

video, the first combat use of

autonomous surface vessels by the US

military, your technology. What was the

biggest lesson from that operation?

>> I mean, it's it's delivering the

capabilities to our war fighters at

speed and scale. That's what Seronic has

been based around since the day we

founded the company. We looked around

and we said, "What is the capability

that our Navy is missing, right? And how

do we build that fast and get that to

our war fighters to deliver real combat

power?" And that's actually exactly what

we're doing in Brownsville as well.

There there's a ship building crisis in

this country right now. China out builds

us 230 to1. Our naval fleet is actually

shrinking. We have 0.1%

of global ship building capacity. Port

Alpha is going to turn all of that

around. Um on day one, our initial pro

our initial phase of the project, this

will be the largest shipyard in the

country. We will have 150,000 gross tons

of ship building capacity, which means

we will 1.5x the commercial ship

building capacity in the United States.

And that's just phase one. We're going

to take that all the way up to 2 million

gross tons of capacity, 20xing the

current capacity in this country. And

that's what we need. Um, and in

Brownsville, what you're going to see is

the development of with SpaceX already

being there, it's just going to become a

critical corridor, not just for business

and commerce, but for national security.

>> Dino, we just have about 60 seconds left

in the program. You said this is phase

one. Would you just give us a look into

the future in phase two?

>> Absolutely. So basing the the initial

phase of the project on 835 acres. We

talked about massive land availability,

we have the ability to expand up to and

over 4,000 acres. We're going to

continue to invest, continue to build

out infrastructure. And keep in mind, we

are building a brand new shipyard. This

is built from the ground up to be the

most advanced, to be the most efficient,

but most importantly add net new

capacity, brand new ship building

capabilities to this country in a way

that we haven't seen since World War II.

>> Texas Governor Greg Abbott, Seronic CEO

Dina Mukus, of course, our Texas bureau

chief Julie Fine. Really appreciate all

of your time this morning. Again,

Seronic, a $3.2 2 billion commitment to

South Texas. Coming up here on Bloomberg

Tech, Ryan Cohen, the GameStop CEO,

joins us to discuss his and GameStop's

bid for eBay. We're going to talk about

the future of gaming. We're going to

talk about the future of a lot of

things. Um, this is what markets look

like right now. We are down and it is

chip stock, semiconductors really

weighing on the technology sector. TSMC,

the world's biggest chip manufacturer,

raised its sales outlook. It beat across

the board, but it also said spending

will be higher, not just this year by

the $8 billion, but in aggregate over a

number of years. So, the market's taking

that commentary on the higher spending

environment and is now a little worried

about it. The higher spending, does it

justify the valuations of some of these

companies? We're halfway through the

program. We have a very big conversation

coming up next. Do not go far. From San

Francisco, this is Bloomberg Tech.

Welcome back to Bloomberg Tech. Chip

stocks are dragging the market lower.

TSMC's US listed shares are off session

lows, but lower. the world's biggest

contract manufacturer for chips raised

its sales outlook beat across the board

but sent spending this year and over the

next few years will be higher. So now

the market's like looking at that and

saying okay even higher spending

expectations across AI

how does that relate to valuations right

now that's kind of the story we also

have a deal confirmation Uber has agreed

to buy delivery hero $14.8 8 billion US

in euro terms, €41.50

a share. It gets Uber into 50 markets

outside of the United States that it's

not in private equity is taking a role

and buying delivery heroes business in

some markets that Uber is not taking on.

One of the most read stories on

Bloomberg this morning, but it's a

packed show. So, I wanted to bring you

just the basic details. Here's the big

one. One of the biggest potential deals

in technology is GameStop's attempt to

buy eBay. In May, the video game

retailer and its CEO Ryan Cohen launched

an unsolicited $56 billion bid for the

e-commerce platform. eBay rejected the

offer, calling it neither credible nor

attractive. Since then, Cohen has

scrapped a controversial multi-billion

dollar pay package, and GameStop

shareholders have approved increasing

the company's authorized share count,

giving it more flexibility to pursue

strategic transactions. So, where does

the deal stand now? Ryan Cohen joins us

on Bloomberg television and radio. Ryan,

thank you for your time and good

morning. Welcome to Bloomberg Tech. on

the

long list of things that have happened

since May. Our audience just has a very

simple question for you, which is what's

changed, what's developed in that period

of time.

>> There has been a uh a complete failure

by the media to explain why this

transaction makes sense. And so, number

one,

my track record, Chewy and GameStop, it

speaks for themselves. my alignment with

shareholders. I'm putting $500 million

of my own money into this transaction.

The high margin growth opportunities for

this business within live commerce,

which the company has not been doing

well and using GameStop stores as nodes

for both the marketplace and live

commerce is huge cuz the business today

in live commerce is tiny. Then building

out a digital marketplace for in-game

items. Those are just like some of the

high growth opportunities within the

business. And then there is the cost

takeout opportunity. I've committed to

taking out $2 billion within the first

year. And that's just the beginning. So

this whole narrative that the business

is going to be too leveraged is a

fantasy invented by the media and it's

just simply not true.

on the banking side.

Let's go there.

You lined up some banking support,

right? And I think that one of the

concerns that Moody's put out there as

an example was the credit rating and the

creditworthiness of the combined entity.

So again another question from the

audience is explain the banking support

that you've you've secured since May but

also that concern that the debt

component of it what the the credit

negative outlook would be for a combined

entity based on the plan that you've

just outlined.

>> We have a highly confident letter from

our bankers. We have a lot of parties

that are interested in this transaction

and the most important thing

ultimately if we can't get the debt then

it means that eBay can't get the debt

and eBay can get the debt. So this

entire narrative

is simply not true.

>> I didn't explain that question very well

Ryan if if I'm self-reflective honest

about it. So I'm just going to go back

to it. Your financing letter is from TD,

right? And it was widely reported to

depend on the combined company

maintaining investment grade credit

rating. And then Moody's came out and

said that this deal would be credit

negative for the combined company. Have

you taken steps to address that?

Nobody has reached out to us including

the credit agencies but the pro- forma

company is going to be investment grade.

We talked at the beginning of of of the

conversation about shareholders

improving increasing sorry the the

company's authorized share count. Does

that allow you to do something new that

you couldn't have otherwise done in the

context of the eBay deal?

Yeah, I mean we Yes, it does.

>> And what would that be?

>> Buy the business, buy eBay.

I posted on X that you were coming on

the show and and you know in the context

of of what you've done

with financial mechanics of late, you

know, the question that existing

GameStop shareholders sent to me over

and over again is, you know, you're

asking them to accept pretty significant

dilution and and they're basically

asking like what's the payoff for them

in accepting that dilution?

>> There's different forms of dilution.

Most dilution

is dilutive to shareholders. When you're

buying a business

and I've committed to pulling $2 billion

of costs out, so if you do the math, I'm

buying a business for 56 billion.

And the business is forecasted to make

over 3.5 billion.

That's uh that's the consensus for 2026

plus what uh what I would be pulling out

in cost. So you're at over 5.5 billion

of IBIDA and then the ability to take

this platform and build a much much

larger business.

The upside is huge. So I wouldn't go and

buy a business if I didn't think I can

take it from 56 billion and turn it into

multiples larger. So it's accretive to

shareholders but most of the time when

companies are issuing shares it's

dilutive and earnings per share goes

down. In this case it's a different

story but most of the time you have

management teams a good example is this

company that collect tons of risk-free

compensation and they're not aligned

with shareholders. In this case that's

not the case.

>> You have the letter from Tday. You said

earlier you were going to put $500

million of your own money into this

transaction. Outside of that, is there

any other financing support, any other

parties that since midMay you've you've

pulled into it?

>> We've had a lot of parties come to us.

Uh, and there's been a lot of interest

from the capital markets.

>> We're live on Bloomberg television and

Bloomberg radio with Ryan Cohen, the CEO

of GameStop. We're talking about uh Ryan

and GameStop's bid to buy eBay. Really

simple question. Has anyone from eBay,

the management team or the board

reached back out to you or responded to

you in this interim period?

>> No, I hope they do, but um

they're entrenched and they're hiding

behind their their adviserss.

If I go to teddy.com on any browser, I'm

diverted back to gamestop.com.

Why

I'm focused on GameStop?

>> The root of the question is, let's say

that you proceed with this.

There's a very wide range of of opinion,

speculation basically. Why does Ryan

Cohen want to buy eBay? at one extreme

is the idea that you just want to be the

CEO of eBay rather than than GameStop.

At the other end is the idea that you

have a a bigger plan, a master plan. You

kind of talked about it a little bit

earlier,

but what's the reality here? What is the

bigger picture for a combined entity or

referencing teddy.com?

some there's some history there, but but

a sort of conglomerate, a holding

company.

>> E eBay is a platform

that I can build into something much

more profitable and much larger. the

ability to take

GameStop stores and our experience in

gaming and refurbished tech and

collectibles combined with eBay and be a

leader in live commerce, build out an

in-game digital marketplace,

use the stores for same day

authentication,

and ultimately pull down pull out

significant cost. And none of these

things come at the expense of growth.

It's actually the opposite. The more

efficient you get, the easier it is to

grow.

It makes too much sense. So that's why I

want a business. That's why I want to

buy it. It's not that complicated. There

is such overlap between the businesses.

And my experience is in e-commerce,

>> right? Are you improved prepared to

improve the offer, Ryan?

I'm not going to negotiate against

myself,

>> but that might be what it takes.

>> We'll see what happens. Ed,

>> you've talked about this a little bit

recently. A lot of people point out to

me, you've done a number of interviews

in quick succession, right?

What happens if eBay just keeps saying

no?

Ultimately, it's going to be the owners

of the business that are going to decide

who is more competent, who's more

aligned with shareholders,

and who's more capable of building a

much much larger business. So,

the management team can only hide for so

long. And I would love for this to be a

collaborative process and a consensual

process. That's my preference. That's

number one. But if that doesn't happen,

then it's going to be shareholders

decision cuz they're the owners of the

business.

>> Right. I do want to talk a lot more

about the GameStop business, a lot more

about eBay, and we're going to take a

break and come back and do that. Talk

about what's really happening. I have a

final question from the audience that I

I promised I would put to you and it's

from GameStop shareholders. A lot of

GameStop shareholders have asked about

the warrants that expire in October. You

know, another recent or relatively

recent financial transaction from the

company. What should they expect happens

with those warrants between now and and

October of this year?

>> I don't have a crystal ball.

Um I can't answer that question.

Okay. Their expectation is that when

they expire, I think the date's October

26th, is that's the outcome.

>> Ed,

people that have invested alongside me

when it comes to Chewy or GameStop and

me committing uh $500 million into eBay,

they've done they've done very very

well.

So, I don't have a crystal ball. I can't

predict the future, nor can anyone that

I've ever met. But GameStop is a

business that

was on the brink of bankruptcy and

everybody was betting against it for

good reason. And now the company is

making more money than it's ever made in

its history. Ryan Cohen, CEO of

GameStop, you're sticking around. We're

going to take a break and then we're

going to talk about that business,

GameStop, and what it's doing. We'll be

right back. This is Bloomberg Tech.

Okay, we're live on Bloomberg Tech with

GameStop CEO Ryan Cohen. Let's put the

eBay deal potential deal aside for a

moment. Whatever happens with eBay,

GameStop's still one of the biggest

names in gaming. I get a lot of

questions about that. And Ryan, if if

you're up for it, let's start with Grand

Theft Auto 6. You know, it's expected to

be one of the biggest entertainment

launches ever. You go to gamestop.com,

pre-orders are available. What are you

seeing? what are customers telling you.

>> Ed, I want to go back and talk about

eBay.

>> I want to know if you wanted to build if

you wanted to build the trillion dollar

business and

you had the existing management team,

>> guy running the company, makes 30

million bucks a year, hasn't bought a

single share in the open market, and

then you have someone that's committed

500 million. My me very, we don't have

to talk in hypotheticals.

Who's more competent and capable of

building a larger business?

>> I want you to look your viewers in the

eyes and tell them,

>> are you going to bet on entrenched

management team running the business or

me? Someone that went headto-head

against Amazon selling 30 lb bags of dog

food, turned around a very tough

situation at GameStop, and now the

company's making lots of money.

>> I really want to know your opinion.

Ryan, I'm not going to I'm not here to

answer the question. The audience

doesn't care what I think about this

deal. They're here for you. But the link

to Grand Theft Auto 6, for what it's

worth, GameStop has 2200 stores across

the jurisdictions it operates in, right?

It sells hardware, video games, consoles

that are going discless at some point.

You need to hire people for those

stores. People are looking at what they

know about the proposed structure of

this deal that's on the table and trying

to understand in part what you talked

about earlier, right? Taking the costs

out of the combined business to

understand what the plan is here, what

the master plan is for the combined

entity. So, so let's go with that. Like

what is this the synergistic play here

between eBay, the e-commerce business,

and GameStop, which right now is a

brickandmortar business selling video

games, consoles, collectibles.

We are going to unlock live commerce.

We're going to use the stores for same

day authentication. I'll give you an

example. Let's just talk about trading

cards right now, right? The biggest

issue on eBay is fraud. So they've done

really well on authenticity guarantee

because you know when you buy an item

now and it's got the AG certification,

it's legit. It's going through a

centralized model right now. So the

sellers shipping it costs a lot of

money. There's a few fulfillment centers

takes some time and then it goes to the

buyer. can ultimately go once these

businesses are together. We've got 1,600

nodes. They're within a 15minute drive

of 80% of the population and you can

authenticate the item same day for

cheaper. So that's just one item. Live

commerce, the business is getting

smoked. Live commerce is a trillion

dollar addressable market. It's really,

really big in Asia. There's some

competitors in the US that are doing

very, very well. eBay is not doing very

well. So the ability to go and use our

nodes for as studios and as fulfillment

and logistics for content creators is

huge. And then we have a bit of

experience in gaming when it comes to

the buy trade and sell by the the buy,

sell, and trade model. So the ability

for us to use eBay's rails to build out

an in-game digital marketplace is huge.

So those are just some of the

opportunities

to take this business and build it into

something that the existing management

team on a standalone basis can never do.

So the situation is collectibles are

clearly a central part of the plan right

if this deal goes through the combined

entity

on gaming. It sounds like you are

preparing for a world where gaming is

discless. There will be a trade in

secondhand trade in. But that this is

the umbrella point, right? Like if the

hardware makers Sony, Xbox are

reportedly moving to discus on the

console side, future game launches are

digital only. Where does that fit in for

your business plan in the combined

entity?

>> It doesn't matter. It doesn't matter at

all. software. It mattered in the past.

Software today makes up less than 12% of

the business and collectibles makes up

over half the business. So, it's totally

totally irrelevant.

>> Is there anything that you learned from

the NFT marketplace uh experiment at

GameStop that that you you think you can

put into practice if the deal goes

through in this combined entity? What

what was the takeaway for you from that?

>> What does that mean?

>> GameStop has looked at digital business

lines outside of the physical world.

What did you learn from GameStop looking

at those markets?

>> Do you know how much money GameStop is

making today?

>> Please.

>> 143 million in Q1. Highest operating

earnings in the company's history. They

were surprised at the strength of

earnings recently,

>> but again, you know, the audience

>> because everybody in the everybody in

the media wants GameStop to fail.

Explain that to me, Ed. Why everybody in

the media in the mainstream media wants

GameStop to fail? You've got there's

nothing more American than GameStop

committing its balance sheet and this

company which is a great American

company eBay being aligned with

shareholders.

That's how this country was built is

risking

your own capital and if the business

succeeds you make money and if the

business fails you lose a lot of money.

And what I want to understand is why

everybody wants GameStop to fail.

Both its core business and in this

transaction.

What world do we live in where we're

betting against we're we're rooting for

the the an entrenched management team

that has no skin in the game and and

someone that's risking their own

capital. And there's nothing more

American than that.

You want us to fail. I want to

understand that.

>> Ryan, I'm a technology journalist. I

host the tech show on Bloomberg. When

this deal broke in May, I and my team

invited you onto the show. And it took a

number of months. You're now here on the

show. And in advance of you coming on

the show, I posted on social media that

you were coming on the show. I always

give our audience the opportunity to ask

their questions. That's what we're doing

here, giving you an opportunity to

present. I think the the the one

outstanding thing is people asking when

will they see a sort of codified plan

from you, a business plan presented for

this combined entity on paper. You

you've explained a bit of it in the

course of this conversation, but that's

that's why the audience is here to

listen to you to explain the future of a

business that is a combination of

GameStop and eBay.

Well, I'm going to bring that plan

directly to shareholders. It's uh it's

not going to be through a a TV show. You

can count on it. It's going to be

directly to shareholders.

>> And do you have a timeline for that,

Ryan?

>> We've had um an influx of parties that

have come to ask and they're interested

and in due course the the plan is going

to be made public, but

in the short term involves building a

much larger business. I mean, you know,

>> what what is the goal of business? What

is my goal? I own a lot of stock and I

don't have any perverse incentive. So,

it's to make the business

a lot more profitable and to maximize

shareholder value. So, that's the plan.

It's not that complicated. And I've

spoken about huge growth areas within

cutting costs. That's just short term,

but live commerce and building out an

in-game digital marketplace. So, I've

shared that with you, but everyone in

the past have said, "What's the business

plan?" What's the business plan? But

they only do that with GameStop for

whatever reason. Well, you know what the

business plan is? It's to make money.

GameStop just reported its highest

earnings in the company's history with a

fraction of the stores and everybody in

the media said GameStop was going to

fail. So, the plan is to make more

money. The plan is to maximize

shareholder value. Am I going to go and

share my proprietary plan and every

single detail and give it out to my

competitors? That that'd be a pretty

stupid thing to do.

Ryan, we have literally 30 seconds left

in the show. Again, are you prepared to

raise your offer for eBay? You've set

out your vision, but the action you're

willing to take to do it.

>> I'm not going to call my shots, but

we're coming for eBay one way or

another.

>> Ryan Cohen, CEO of GameStop, an extended

conversation on Bloomberg Tech. Thank

you for your time. That does it for this

edition of Bloomberg Tech. Uh recap that

conversation with GameStop CEO Ryan

Cohen, the others in the program. There

was a lot of technology news. You know

where to find the podcast on the

Bloomberg terminal and online. From San

Francisco, this is Bloomberg Tech.