TSMC's Market Jolt, Saronic's Texas Bet and GameStop's eBay Bid | Bloomberg Tech 7/16/2026

ANNOUNCER: "BLOOMBERG TECH" IS LIVE WITH ED LUDLOW IN SAN FRANCISCO. ED: THIS IS "BLOOMBERG TECH" $. COMING UP, U.S. EQUITY MARKETS DROP AFTER TSMC’S RESULTS TOPPING EXPECTATIONS, BUT ALSO SPENDING MORE TO MEET A.I.-RELATED DEMAND, INCLUDING A BIGGER COMMITMENT TO ITS U.S. BUILDOUT. PLUS, A $3.2 BILLION BET ON TEXAS. WE SPEAK TO THE C.E.O. OF THE AUTONOMOUS MARITIME DRONE COMPANY AND TEXAS GOVERNOR, GREG ABBOTT. AND LATER THIS HOUR, RYAN COHEN, C.E.O. OF GAME STOP, 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 A.I. SPENDING. THE CATALYST, TSMC’S QUARTERLY RESULTS. THEY ACTUALLY RAISED THE SALES OUTLOOK, BEAT ACROSS THE BOARD, AND THEN SEND 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’S GOING TO GET AND HOW IS IT JUSTIFYING CURRENT VALUATIONS? THESE ARE WHAT THE MARKETS LOOK LIKE RIGHT NOW. UNDERPERFORMANCE IN CHIP STOCKS. FOR WHAT IT’S WORTH, TSMC’S SHARES ARE KIND OF OFF SESSION LOWS BUT WE ARE MARKEDLY LOWER THAT. TAKES US INTO TODAY’S BIG NUMBER. $265 BILLION. THAT’S TOTAL VALUE OF TSMC’S U.S. PLANNED INVESTMENT. ADDING $100 BILLION FOR JUST FOUR NEW SEMICONDUCTOR FABS. MIKE SHEPHERD HAS MORE. $100 BILLION IS A LOT MORE, BUT IT’S FOR JUST FOUR FABS. THAT’S THE REALITY OF THE ECONOMICS, BUILDING OUT INFRASTRUCTURE. WHAT DO WE NEED TO KNOW ABOUT THIS? >> THIS IS A NUMBER THAT HAS BEEN IN CIRCULATION SINCE THE BEGINNING OF THE YEAR, WHEN TSMC INDICATED TO THE U.S. THAT IT WOULD BE BUILDING THOSE FOUR ADDITIONAL PLANTS. BRINGING THE TOTAL PLAN FOR ARIZONA TO 10 FABS, PLUS TWO PACKAGING PLANTS, OVER AN INDETERMINANT AMOUNT OF TIME. IT TAKES A LONG TIME TO CONSTRUCT THESE FACILITIES AND REALLY 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 IN MORE GEOLOGICAL TERMS OF TIME THANKING IS IMMEDIATE AND AROUND THE CORNER. BUT IT IS A HUGE COMMITMENT AND IT WAS DRIVEN IN PART 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 $100 BILLION TO IT. ED: THAT’S THE BIT I’M KIND OF INTERESTED IN. THERE’S A LOT OF 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’RE BULLISH ON AMERICA? >> WELL IN PART BECAUSE IF YOU LOOK BACK AT THE C.E.O.’S COMMENTS BACK IN JUNE, HE’S SAYING THAT IT WILL TAKE YEARS TO MEET ALL THE DEMAND FOR CHIPS THAT HIS COMPANY MAKES, FROM U.S. CUSTOMERS. AND THAT’S REALLY TRUE ACROSS THE BOARD. YOU ALSO HEARD THAT IN YOUR CONVERSATIONS WITH THE C.E.O. OF SK HYNIX SAYING THE MEMORY SHORTAGE IS REAL AND IT WILL BE HERE THROUGH 2030. AND THAT IS BECAUSE OF THE UNPRECEDENTED DEMAND CREATED BY THE A.I. BOOM. THERE IS SO MUCH NEED FOR CHIPS AND PROCESSES TO GO INTO ALL OF THOSE A.I. DATA CENTERS BEING BUILT ACROSS THE U.S. 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 BE MADE SOMEPLACE. TSMC IS LOOKING TO DIVERSIFY GEOGRAPHICALLY OUT OF TAIWAN WHERE IT PRESENTABLY MAKE -- PRINCABLY MAKE -- PRINCIPALLY MAKES MOST OF ITS PRODUCTS. IT NEEDS TO SERVET U.S. CUSTOMER BAZEMORE AND ALSO RECOGNIZES THAT THE POLITICAL PRESSURE HERE IN WASHINGTON TO EXPANNED AND INVEST NOT ONLY IN TAIWAN BUT OTHER MAJOR ECONOMIES IS VERY STRONG AGAIN. ED: MIKE SHEPHERD, THANK YOU VERY MUCH. LET’S GET MORE ON TSMC’S RESULTS AND BRING IN TAMMIE QIU. TMSC HIKED ITS SALES OUTLOOK BUT BOOSTED ITS SPENDING PLANS. FOR YOU, WHICH WAS THE MORE IMPORTANT METRIC? >> BOTH ARE IMPORTANT BECAUSE REASON BEING IS NORMALLY A GOOD IDEA TO SAY EQUIPMENT COMPANIES WILL BENEFIT FROM THE STRONG CAPEX OF TSMC. BUT AT THE SAME TIME WE DO WANT TO SEE THAT TSMC’S DOING WELL FOR THEIR OWN BUSINESS TO BE ABLE TO SUPPORT THE HIGHER CAPEX SPENDING FOR LONGER. TSMC CAUGHT THAT THE A.I. INDUSTRY IS NEW AND DEMAND WILL GO ALL THE WAY INTO 2029-2030 WHICH IS A POSITIVE SIGN IN MY VIEW FOR THE INDUSTRY. ED: WE’RE GOING TO GET TO ASML IN JUST A MOMENT, PRETTY MUCH THE CRITICAL KEY CHIP EQUIPMENT NAME BUT THE REACTION OF U.S. EQUITY MARKETS TO TSMC SAYING NOT JUST THIS YEAR’S 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. WHY IS THAT A NEGATIVE IN THE FIRST INSTANCE? >> IN MY VIEW, THE SEMIEQUIPMENT AND ALSO TSMC SHARE PRICE HAS BEEN DOWN AFTER THAT MASSIVE ANNOUNCEMENT, DESPITE THE REVENUE UPGRADE, ETC. BECAUSE THEY ALL DID WELL OVER THE PAST TWO MONTHS AND THE INVESTOR EXPECTATION HAS BEEN INCREASING DRAMATICALLY. SO IN OUR VIEW, IT JUST TAKE A BRIEF AND AT THE SAME TIME THE 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 A.I. TRADE. SO IN OUR VIEW, IT WOULD JUST BE A SHORT-TERM PROFIT TAKING. ED: LET’S GO INTO ASML. WE DIDN’T HAVE A SHOW ON TUESDAY AND WEDNESDAY OF THIS WEEK BECAUSE OF FED CHAIR WARSH’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 HOW THAT MANIFESTS IS A GREATER NUMBER OF UNITS ON THE LOW AND HIGH SIDE. YOUR OVERALL REACTION TO WHAT ASML SAID. >> ASML’S EARNINGS YESTERDAY HAS BEEN AMAZING IN TERMS OF HOW THEY REVISED THE GUIDANCE FOR THE SECOND TIME THIS YEAR. BESIDES REVENUE, I WOULD POINT OUT ASML ALSO REVISED UP MARGIN EXPECTATION THIS YEAR FROM MID 52S FOR MID 55%. WHICH SUGGESTS THAT ASML IS SEEING INCREMENTAL DEMAND COMING FROM THEIR CUSTOMERS AND CUSTOMERS JUST NEED MORE CAPACITY OVER TIME. SO THEREFORE FROM MY PERSPECTIVE, I BELIEVE THAT ASML HAS BEEN SHOWING BASED ON THEIR NUMBERS THAT THE WHOLE A.I. INVESTMENT, CAPEX EXPANSION, CAPACITY IS NOT COMING TO AN END ANY TIME. AND THE SHARE PRICE MOVE OF YESTERDAY FROM AS IN, L’S SIDE IS VERY SIMILAR TO THE LOGIC OF TSMC. THE SHARE PRICE HAS DONE REALLY WELL OVER THE LAST THREE 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 LEVEL OF CUSTOMER SPEND SOMETHING ONLY GOING UP. ED: ASML IS IN A POSITION WHERE THERE’S ESSENTIALLY A BACKLOG, RIGHT? ORDERS ARE QUEUED UP ALL THE WAY TO 2028. WE’VE SPENT A LOT OF TIME RECENTLY ON THE SHOW THINKING IN THE CONTEXT OF MEMORY CHIPS ABOUT THE HISTORIC BOOM AND BUST CYCLES. THE CYCLICAL NATURE OF THOSE. HOW DOES ASML MANAGE THAT 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? >> FROM ASML PERSPECTIVE, THEY ARE NORMALLY VERY, VERY CAUTIOUS WHEN THEY ARE ADDING CAPACITY OR COMMITTING TO ADDING MORE CAPACITY. BECAUSE COMPANIES DON’T WANT TO DRIVE ON THOSE ANTI-CAPACITY THROUGH THE DOWN TURN, AS YOU SUGGESTED. SO WE BELIEVE THAM ASML HAS BEEN TALKING WITH CUSTOMERS ON THE VERY FREQUENT BASIS TO UNDER WHAT’S THE REAL DEMAND OF THE CUSTOMERS -- UNDERSTAND WHAT’S THE REAL DEMAND OF THE CUSTOMERS AND THE END MARKET DRIVER OF THOSE BEFORE THEY BUILT CAPACITY AND OF COURSE WE HAVE TO BALANCE THE DEMAND FROM BOTH LOGIC AND MEMORY CUSTOMERS. AND WE DO BELIEVE THAT AT THIS POINT OF TIME, THEY ARE TREATING BOTH OF THE SECTORS AS SUPER GROWTH PART OF THE CYCLE. THEREFORE THEY HAVE BEEN BUILDING FOR BOTH OF THEM INSTEAD OF TRYING TO SELECT WHICH CUSTOMER THEY WANT TO SERVE FIRST. WE ARE IN THE ENVIRONMENT THAT EVERY COMPONENT IN THIS A.I. SUPPLY CHAIN IS UNDER SHORTAGE SO THEREFORE WE BELIEVE THAT ASML HAS BEEN SPEAKING TO CUSTOMERS, UNDER THE REQUIREMENT, AND BUILDING FOR BOTH OF THE SECTORS IN ORDER TO FULFILL MORE INCREMENTAL DEMAND IN THE COMING YEARS. ED: WE WERE JUST SHOWING ASML’S TOP CUSTOMERS UNSURPRISINGLY, TSMC SAMSUNG INTEL. BUT I WAS LOOKING AT THE TWO SYSTEM CELLS BY REGION AS WELL. MOST OF THIS EQUIPMENT IS GOING TO SOUTH KOREA, THEN TAIWAN, 30% TO TAIWAN. BUT ONLY 9% TO THE U.S. 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 THE SHARE. WITH SAMSUNG FURTHER EXPANDING THEIR FABS IN THE U.S., WITH TSMC EXPANDING FURTHER IN THE U.S. WITH INCREMENTAL COMMITMENT, WE DO BELIEVE THAT U.S. 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 U.S., IT’S JUST LUMPINESS OF THE FACTOR OF THE EQUIPMENT, GIVEN THAT ASML’S EQUIPMENT IS SOLD FOR MORE THAN $200 MILLION FOR EQUIPMENT. SO WHO DOES WHAT MOVES THE QUARRELERLY TREND -- QUARTERLY TREND. ED: THANK YOU VERY MUCH. AS THE A.I. WORLD GIVES UP FOR A BIG -- GEARS UP FOR A BIG EARNINGS SEASON, NVIDIA C.E.O. JENSEN HUANG ENJOYED THE FINGER FOOD ALONGSIDE JAPANESE SUPPLIERS TO CALL THEIR SUPPORT FOR THE A.I. SUPPLY CHAIN. THOSE PRESENT INCLUDED EXECUTORS OF COMPANIES LIKE YORKSHIRE AND TOKYO ELECTRON, BOTH OF WHICH SUPPLY ESSENTIAL COMPONENTS FOR NVIDIA’S A.I. SYSTEMS. NOT ONLY THAT, JAPAN IS PLANNING TO PURCHASE 27,500 NEXT GENERATION RUBIN CHIPS TO MR. AN A.I. FOR ROW -- TO BUILD AN A.I. FOR ROBOTS. SARONIK MAKES A BET ON TEXAS. WE SPEAK WITH DINO AND TEXAS GOVERNOR GREG ABBOTT. THIS IS "BLOOMBERG TECH." ♪ ED: TEXAS BECOMING THE EPICENTER OF AMERICA'S NEXT INDUSTRIAL BUILDOUT. AI DATA CENTERS IN SEMICONDUCTORS TO DEFENSE TECHNOLOGY. NOW ECONOMIST SHIPBUILDERS MAKING ITS OWN MAJOR BET ON THE STATE. 3.2 BILLION DOLLAR INVESTMENT BUILDING A NEXGEN SHIPYARD IN THE PORT OF BROWNSVILLE, MANUFACTURING LARGE CLASS AT TAUNUS SURFACE VESSELS. JOINING US NOW IS THE CEO AND TEXAS GOVERNOR GREG ABBOTT. GOOD MORNING TO YOU FROM SAN FRANCISCO. IF WE COULD, I WOULD LIKE TO START WITH AN OPERATIONAL UP DATE PLEASE ON THE FLOODING SITUATION IN YOUR STATE. I KNOW IT IS SOMETHING YOU WANT TO COMMUNICATE ON. >> THANK YOU FOR OFFERING THAT UP. WE'VE BEEN FOLLOWING IT, THE MESO FLOODING GOING ON IN CENTRAL AND SOUTH TEXAS. IT'S THE SAME AREA WHERE WE HAD THE MASSIVE FOURTH OF JULY FLOODING LAST YEAR. THE DIFFERENCES WE ARE GETTING MORE RAIN OVER THE NEXT 24 HOURS AND WE GOT LAST YEAR. OVERNIGHT, THERE WAS ONE LIFE LOST. WE ARE CONTINUING TO SURGERY SOURCES. WE'VE MADE 80 RESCUES ALREADY. I WILL BE LEAVING HERE TO GO FOCUS ON OUR CURRENT RESPONSE IN REGIONS RANGING FROM THE KERRVILLE AREA ALL THE WAY DOWN TO UVALDE WHERE WE EXPECT CONTINUED FLOODING. I WANT TO MAKE SURE ALL TEXANS KNOW THAT WE HAVE MORE THAN 1000 3000 -- 1300 PERSONNEL. WE HAVE ALL RESOURCES, BOATS, HELICOPTERS AVAILABLE TO MAKE SURE WE WILL BE DOING EVERY POSSIBLE TO SAVE HUMAN LIFE. >> JUST A HORRIBLE TIME LAST YEAR WHEN THERE WAS 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? GOV. ABBOTT: GREAT QUESTION. YOU ARE ONE OF THE BEST COMMUNICATIONS -- COMMUNICATORS THAT WE COULD HAVE OUT THERE. THERE ARE RAPIDLY RISING RIVERS THAT WILL CONTINUE TO RISE THROUGH THE REMAINDER OF TODAY AND TOMORROW. IF YOU DO NOT NEED TO BE OUT, DON'T GO OUT. WE HAVE ONE LEADING REASON WHY PEOPLE MAY LOSE THEIR LIFE'S RISING WATERS LIKE THIS BECAUSE PEOPLE DRIVE INTO WATERWAYS AND GET SWEPT AWAY. THERE'S AN OLD SAYING, TURNAROUND, DON'T DROWN. THAT APPLIES HERE. BECAUSE RIVERS ARE RISING SO RAPIDLY, IF YOU ARE NEAR A RIVER, TRY TO GET AWAY FROM THE RIVER SO YOU CAN PROTECT YOUR LIFE. EACH INDIVIDUAL IN TEXAS HAS THE CAPABILITY OF PROTECTING AND SAVING THEIR OWN LIFE BY STAYING AWAY FROM THE RISING RIVERS AND NOT DRIVING INTO IT. ED: THANK YOU VERY MUCH FOR THAT. SERRANO, A DEFENSE TECH STARTUP FOCUSED ON MARITIME DRONES. INVESTING $3.2 BILLION IN THE STATE OF TEXAS. A FACILITY IN THE PORT OF BROWNSVILLE. THE CEO, WELCOME BACK TO BLOOMBERG TECH. THE QUESTION WE GET MOST OFTEN IS THE SIMPLE ONE. WHY TEXAS? WHAT DID TEXAS DO TO WIN YOUR BUSINESS? >> BEFORE I EVEN TALK ABOUT THAT I WANT TO SAY, THOUGHTS AND PRAYERS GO OUT TO EVERYBODY INVOLVED IN THE FLOODING. WE KEEP THAT FRONT OF MIND AND WE ARE PROUD TO CALL TEXAS HOME. IF THERE'S ANYTHING THAT WE CAN DO TO SUPPORT, PLEASE LET US KNOW. TEXAS IS A GREAT STATE. THE LEADERSHIP AND THE PARTNER WITH THE GOVERNOR. WE ARE BUILDING A SHIPYARD. THE MOST ADVANCED, HIGHEST SHIPYARD IN THE COUNTRY AND IN THE WORLD. WHEN YOU DO THAT, YOU ARE LOOKING FOR LAND AVAILABILITY, DEEPWATER ACCESS. THOSE THINGS ARE BINARY. YOU HAVE THEM OR YOU DON'T. WHAT TIPPED THE SCALES WAS THE FOR -- WORKFORCE. THE PEOPLE IN BROWNSVILLE THAT WE WILL BUILD THIS PROJECT AROUND. THE PARTNERSHIP WITH THE STATE AND LOCAL GOVERNMENT. IT'S THE GOVERNORS PARTNERSHIP WITH THE STATE, CAMERON COUNTY, IN THE CITY THAT HELPS BRING THIS GENERATIONAL PROJECT TO LIFE. ED: BROWNSVILLE, CLOSE PROXIMITY TO SPACEX. IT WAS INTERESTING THAT THE WORKFORCE WAS THE TIPPING POINT. HOW COMPETITIVE IS THAT IN YOUR INDUSTRY RIGHT NOW IN HIRING THE BEST PEOPLE ACROSS LOTS OF DIFFERENT DISCIPLINES? DINO: IT IS MORE COLLABORATIVE THAN COMPETITIVE. YOU ARE BUILDING UP IN VERSE -- INDUSTRY. YOU ARE INVESTING IN THE COMMUNITY. WE INVEST BILLIONS OF DOLLARS NOT JUST AN INFRASTRUCTURE BUT INTO THE LOCAL REGION. WE WILL CREATE 10,000 JOBS AND $160 BILLION OF ECONOMIC IMPACT IN THE REGION OVER THE NEXT 10 YEARS. WITH COMPANIES LIKE SPACEX AND OTHERS DOING THAT, IT CREATES AN ECOSYSTEM NOT ONLY IN THAT PART OF THE STATE BUT THE ENTIRE STATE. JULIE: WE JUST HEARD DINO TALK ABOUT THE WORKFORCE. THAT'S 10,000 JOBS. I WOULD LIKE TO HEAR HOW YOU PLAN TO DEVELOP THE WORKFORCE TO MAKE SURE THAT THERE ARE ENOUGH PEOPLE AVAILABLE. GOV. ABBOTT: TEXAS RANKS NUMBER ONE IN THE UNITED STATES FOR HAVING THE BEST WORKFORCE. NUMBER ONE FOR ADDING MORE JOBS THAN ANY OTHER STATE. THERE'S REASONS FOR THAT. THAT'S BECAUSE WE WORK MORE THAN ANY OTHER STATE TO MAKE SURE WE HAVE THE BEST QUALIFIED WORKFORCE. WE HAVE MASSIVE EDUCATION PROGRAMS ACROSS THE STATE. ONE IS THROUGH THE TEXAS STATE TECHNICAL COLLEGE. WE FOCUS OUR EDUCATION IN TEXAS ON REAL-LIFE JOB SKILLS. WHEN A STUDENT GRADUATES OR COMPLETES THE STUDY THERE, THEY WILL BE READY TO GO INTO THE WORKFORCE. WE TALKED TO SARONIC ABOUT WHAT OUR CAPABILITIES ARE TO MAKE SURE WE CAN DEVELOP THE WORKFORCE THEY NEED. THAT'S WHAT ELON FOR -- ELON MUSK FOUND IN REGARDS TO FACE -- SPACEX. I TALKED TO THE CEOS ALL THE TIME. THEY ARE COMING TO THE STATE OF TEXAS. THEY TELL ME THE LEADING REASON WHY THEY COME IS BECAUSE WE DO HAVE THAT PIPELINE OF WELL-TRAINED WORKFORCE AND WE WILL BE ABLE TO DELIVER FOR SARONIC LIKE WE HAVE FOR ALL THESE OTHER COMPANIES. TEXAS IS HOME TO MORE FORTUNE 500 COMPANY HEADQUARTERS THAN ANY OTHER STATE BECAUSE OF THE WORKFORCE AND SUPPLY THAT WE HAVE. JULIE: WHEN YOU LOOK DOWN THE ROAD FIVE YEARS, WHAT DOES THE RIO GRANDE VALLEY LOOK LIKE WITH THIS ADDITION? GOV. ABBOTT: IT HAS CHANGED DRAMATICALLY. YOU ARE FAMILIAR WITH IT. MANY AMERICANS MAY NOT BE. LISTEN. THE RIO GRANDE VALLEY HAS HISTORICALLY BEEN AN AGRICULTURAL REGION. THINGS LIKE THAT. WHEN YOU LOOK AT CHANGES TAKING PLACE, ONE WAS STAR BASED IN CAMERON COUNTY WHICH IS NEAR THE BROWNSVILLE AREA WITH SARONIC. A MASSIVE EXPLOSION OF ECONOMIC ACTIVITY. BECAUSE OF THAT, GOING BACK TO THE EDUCATION COMPONENT. WHAT OUR UNIVERSITIES ARE DOING IS ESTABLISHING CAMPUSES IN THOSE REGIONS TO MAKE SURE THAT WE WILL BE EDUCATING. IT'S NOT JUST TO BE ABLE TO GO TO WORK FOR SARONIC BUT ALSO FILL THE OTHER EDUCATION NEEDS IN THE AREA. GOING BACK, NOW THE CAMERON CAREY -- CAMERON COUNTY AREA IS GOING TO BE ONE OF THE FASTEST GROWING REGION IN THE ENTIRE STATE. WE ARE BUILDING UP TRANSPORTATION FACILITIES, OTHER FACILITIES TO MAKE SURE THIS WILL BE A THRIVING COMMUNITY. IT SHOWS HOW TEXAS IS THE MOST DIVERSIFIED ECONOMY IN THE UNITED STATES. NOT JUST WITH REGARD TO DIFFERENT BUSINESS SECTORS. GEOGRAPHICALLY IN THE STATE. OBVIOUSLY, THE BOOMING DALLAS AND HOUSTON AREAS. NOW WE HAVE THE RIO GRANDE AREA. SO I STAYED IS ABSOLUTELY BOOMING. WE COULD NOT BE MORE PROUD TO HAVE SARONIC DOWN THERE. REAL QUICK NUMBER. OVER THE COURSE OF THE COMING YEARS, SARONIC WILL BE ADDING UP TO 10,000 NEW JOBS AT $75,000 PER JOB AT LEAST. WHEN YOU PUT IT TOGETHER, THEY WILL BE INJECTING $750 MILLION IN PAYCHECKS FOR OUR FELLOW TEXANS. THIS WILL MAKE A MASSIVE DIFFERENCE IN THE STATE. ED: WE ARE GOING TO PUT UP -- ANOTHER BIG MOMENT FOR YOU. THE FIRST COMBAT USE OF SURFACE VESSELS BY THE U.S. MILITARY, YOUR TECHNOLOGY. WHAT WAS THE BIGGEST LESSON FROM THAT OPERATION? DINO: DELIVERING THE CAPABILITIES FOR OUR FIGHTERS. THAT'S WHAT IT HAS BEEN BASED AROUND THE DAY WE FOUNDED THE COMPANY. WHAT IS THE CAPABILITIES THAT OUR NAVY IS MISSING? HOW DO WE BUILD THAT FAST AND GET THAT TO OUR FIGHTERS TO DELIVER REAL COMBAT POWER? THAT'S WHAT WERE DOING IN BROWNSVILLE AS WELL. THERE'S A CRISIS IN THIS COUNTRY RIGHT NOW. CHINA BUILDS ITS 230-1. THE NAVAL FLEET IS SHRINKING. 0.1% OF GLOBAL SHIPBUILDING CAPACITY. IT'S GOING TO TURN ALL OF THAT AROUND. ON DAY ONE, OUR INITIAL PHASE OF THE PROJECT, THIS WILL BE THE LARGER SHIPYARD IN THE COUNTRY. WE WILL HAVE 150,000 GROSS TONS OF SHIPBUILDING CAPACITY WHICH MEANS WE WILL 1.5 X THE COMMERCIAL SHIPBUILDING CAPACITY IN THE UNITED STATES AND THAT'S JUST PHASE ONE. WE TAKE THAT UP TO 2 MILLION GROSS TONS OF CAPACITY, 20 TIMES THE CURRENT CAPACITY IN THIS COUNTRY AND THAT'S WHAT WE NEED. IN BROWNSVILLE, THE DEVELOPMENT WITH SPACEX BEING THERE. IT WILL BECOME A CRITICAL CORE DOOR NOT JUST FOR COMMERCE BUT FOR NATIONAL SECURITY. ED: WE HAVE 60 SECONDS LEFT IN THE PROGRAM. YOU SAID THIS IS PHASE ONE. WOULD YOU GIVE US A LOOK INTO THE FUTURE AND PHASE TWO? DINO: ABSOLUTELY. THE INITIAL PHASE OF THE PROJECT . WE TALKED ABOUT MASSIVE LAND AVAILABILITY. WE HAVE THE ABILITY TO EXPAND UP TO AND OVER 4000 ACRES. WE WILL CONTINUE TO INVEST AND BUILD OUT INFRASTRUCTURE. KEEP IN MIND, WE ARE BUILDING A BRAND-NEW SHIPYARD. THIS IS BUILT FROM THE GROUND UP TO BE THE MOST ADVANCED AND EFFICIENT. MOST IMPORTANTLY, ADD NET NEW CAPACITY, BRAND-NEW CAPABILITIES TO THIS COUNTRY IN A WAY THAT WE HAVEN'T SEEN SINCE WORLD WAR II. ED: TEXAS GOVERNOR GRAGG ABBOTT, SARONIC CEO. APPRECIATE ALL OF YOUR TIME THIS MORNING. SARONIC, 3.2 BILLION DOLLAR COMMITMENT TO SOUTH TEXAS. COMING UP, RYAN COHEN JOINS US TO DISCUSS HIS AND GAMESTOP'S BID FOR EBAY. WE WILL TALK ABOUT THE FUTURE OF GAMING AND A LOT OF THINGS. THIS IS WHAT MARKETS LOOK LIKE RIGHT NOW. WE ARE DOWN. CHIP STOCK SEMICONDUCTORS REALLY WEIGHING ON THE TECHNOLOGY SECTOR. TSMC, THE WORLD'S BIGGEST CHIP MANUFACTURER, RAISED ITS SALES OUTLOOK. IT SAID SPENDING WILL BE HIGHER. NOT JUST THIS YEAR BY $8 BILLION BUT INACCURATE IT OVER NUMBER OF YEARS. THE MARKET TAKING THE COMMENTARY ON THE HIGHER SPENDING ENVIRONMENT. THE HIGHER SPENDING, DOESN'T JUSTIFY THE VALUATIONS OF THESE COMPANIES? WE ARE HALFWAY THROUGH THE PROGRAM. BIG CONVERSATION COMING UP NEXT. DO NOT GO FAR. THIS IS BLOOMBERG TECH. ♪ ED: WELCOME BACK TO BLOOMBERG TECH. CHIP STOCKS ARE DRAGGING THE MARKET LOWER. TSMC’S U.S. 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 SAID SPENDING THIS YEAR AND OVER THE NEXT FEW YEARS WILL BE HIGHER. SO NOW THE MARKET’S LOOKING AT THAT AND SAYING, OK, EVEN HIGHER SPENDING EXPECTATIONS ACROSS A.I., 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 BILLION U.S., IN EURO TERMS, $41.50 EUROS. 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 HERO’S BUSINESS IN SOME MARKETS THAT EUBER 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 C.E.O., RYAN COHEN, LAUNCHED AN UNSOLICITED $56 BILLION BID FOR THE E-COMMERCE PLATFORM. EBAY REJECTED THE OFFER CALLING IT NEITHER CREDIBLE F NOR ATTRACTIVE. SINCE THEN COHEN HAS SCRAPPED A PAY PACKAGE AND GAMESTOP SHARE HOLDERS 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, TH 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 CHANGEED? WHAT’S DEVELOPED IN THAT PERIOD OF TIME? >> THERE HAS BEEN A COMPLETE FAILURE BY THE MEDIA TO EXPLAIN WHY THIS TRANSACTION MAKES SENSE. AND SO, NUMBER ONE, MY TRACK RECORD. CHEWY AND GAMESTOP SPEAKS FOR ITSELVES. MY ALIGNMENT WITH SHAREHOLDERS, I’M PUTTING $500 MILLION OF MY OWN MONEY INTO THIS TRANSACTION. 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. BECAUSE THE BUSINESS TODAY IN LIVE COMMERCE IS TINY. BUILDING OUT A DIGITAL MARKETPLACE FOR IN-GAME ITEMS, THOSE ARE JUST 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. ED: 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 CREDIT WORTHINESS OF THE COMBINED ENTITY. SO, AGAIN, ANOTHER QUESTION FROM THE AUDIENCE IS, EXPLAIN THE BANKING SUPPORT THAT YOU’VE SECURED SINCE MAY, BUT ALSO THAT CONCERN THAT THE DEBT COMPONENT OF IT, WHAT THE CREDIT NEGATIVE OUTLOOK WOULD BE FOR A COMBINED ENTITY, BASED ON THE PLAN THAT YOU JUST OUTLINED. >> WE HAVE A HIGHLY CONFIDENT LETTER INTEREST 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. ED: I DIDN’T EXPLAIN THAT QUESTION VERY WELL, IF I’M SELF-REFLECTIVE AND HONEST ABOUT IT. I’M GOING TO GO BACK TO IT. YOUR FINANCING DEBT IS FROM T.D., RIGHT, AND IT WAS WIDELY REPORTED TO DEPEND ON THE COMBINED COMPANY MAINTAINING INVESTMENT GRADE CREDIT RATING. AND MOODY’S CAME OUT AND SAID THIS DEAL WOULD BE CREDIT NEGATIVE. FOR THE COMBINED COMPANY. YOU HAVE TAKEN STEPS TO ADDRESS THAT? >> NOBODY HAS REACHED OUT TO US, INCLUDING THE CREDIT AGENCIES. BUT THE PROFORMA COMPANY IS GOING TO BE INVESTMENT GRADE. ED: WE TALKED AT THE BEGINNING OF THE CONVERSATION ABOUT SHAREHOLDERS’ INCREASING 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? >> YES, IT DOES. ED: AND WHAT WOULD THAT BE? >> BUY THE BUSINESS. BUY EBAY. ED: I POSTED ON X THAT YOU WERE COMING ON THE SHOW AND, YOU KNOW, IN THE CONTEXT OF WHAT YOU’VE DONE WITH FINANCIAL MECHANICS OF LATE, YOU KNOW, THE QUESTION THAT EXISTING GAMESTOP SHSHAREHOLDERS SENT TO ME OVER AND OVER AGAIN IS THAT YOU’RE ASKING THEM TO ACCEPT PRETTY SIGNIFICANT DILUTION AND THEY’RE ASKING, WHAT’S THE PAYOFF FOR THEM? IN ACCEPTING THAT DILUTION. >> THERE’S DIFFERENT FORMS OF DILUTION. MOST DILUTION IS DIE LOOTIVE 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 THE CONSENSUS FOR 2026, PLUS WHAT I WOULD BE PULLING OUT IN COSTS, SO YOU’RE AT OVER $5.5 BILLION, 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 COULD TAKE IT FROM $56 BILLION AND TURN IT INTO MULTIPLES LARGER. SMOST 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 THAT ENDER NOT ALIGNED WITH SHAREHOLDERS. IN THIS CASE, THAT’S NOT THE CASE. ED: YOU HAD THE LETTER FROM T.D. 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 MID MAY YOU’VE PULLED INTO IT? >> WE’VE HAD A LOT OF PARTIES COME TO US AND THERE’S BEEN A LOT OF INTEREST FROM THE CAPITAL MARKETS. ED: WE’RE LIVE ON BLOOMBERG TELEVISION AND BLOOMBERG RADIO. WITH RYAN COHEN, THE C.E.O. OF GAMESTOP. WE’RE TALKING ABOUT 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 THEY’RE ENTRENCHED AND THEY’RE HIDING BEHIND THEIR ADVISORS. ED: IF I GO TO TEDDY.COM ON ANY BROWSER, I’M DIVERTED BACK TO GAMESTOP.COM. WHY? >> I’M FOCUSED ON GAMESTOP. ED: THE ROOT OF THE QUESTION IS, LET’S SAY THAT YOU PROCEED WITH THIS. THERE’S A VERY WIDE RANGE OF OPINIONS, SPECULATION BASICALLY, WHY DOES RYAN COHEN WANT TO BUY EBAY? AT ONE EXTREME IS THE IDEA THAT YOU JUST WANT TO BE THE C.E.O. OF EBAY. RATHER THAN GAMESTOP. AT THE OTHER END IS THE IDEA THAT YOU HAVE 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, THERE’S SOME HISTORY THERE, BUT SORT OF A CONGLOMERATE, A HOLDING COMPANY. >> EBAY IS A PLATFORM THAT I CAN BUILD INTO SOMETHING MUCH MORE PROFITABLE AND MUCH LARGER. THE ABILITY TO TAKE GAMESTOP’S STORES AND OUR EXPERIENCE IN GAMING AND REFURBISH 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 -- THERE’S SUCH OVERLAP BETWEEN THE BUSINESSES AND MY EXPERIENCE IS IN ECOMMERCE. ED: RIGHT. ARE YOU PREPARED TO IMPROVE THE OFFER? >> I’M NOT GOING TO NEGOTIATE AGAINST MYSELF. ED: BUT THAT MIGHT BE WHAT IT TAKES. >> WE’LL SEE WHAT HAPPENS, ED. ED: YOU’VE TALKED ABOUT THIS A LITTLE RECENTLY. YOU’VE DONE AM INFORM INTERVIEWS IN QUICK SUGGESTION -- A NUMBER OF INTERVIEWS IN QUICK SUCCESSION. WHAT HAPPENS IF EBAY KEEPS SAY -- SAYING NO? >> ULTIMATELY IT’S GOING TO BE THE OWNERS OF THE BUSINESS THAT ARE GOING TO DECIDE WHO IS MORE COMPETENT, WHO IS MORE ALIGNED WITH SHAREHOLDERS, AND WHO IS 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 BECAUSE THEY’RE THE OWNERS OF THE BUSINESS. ED: RIGHT. DO I 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 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 OCTOBER OF THIS YEAR? >> I DON’T HAVE A CRYSTAL BALL. I CAN’T ANSWER THAT QUESTION. ED: OK. THEIR EXPECTATION IS WHEN THEY EXPIRE, THAT’S THE OUTCOME. >> ED, PEOPLE THAT HAVE INVESTED ALONGSIDE ME WHEN IT COMES TO CHEWY OR GAMESTOP AND ME COMMITTING $500 MILLION INTO EBAY, 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’S MAKING MORE MONEY THAN IT’S EVER MADE IN ITS HISTORY. ED: RYAN COHEN, C.E.O. OF GAMESTOP. YOU’RE STICKING AROUND. WE’RE GOING TO TAKE A BREAK AND THEN TALK ABOUT THAT BUSINESS, GAMESTOP, AND WHAT IT’S DOING. WE’LL BE RIGHT BACK. THIS IS "BLOOMBERG TECH." ♪ WE ARE LIVE ON "BLOOMBERG TECH" LIVE WITH GAMESTOP CEO RYAN COHEN. LET'S PUT THE POTENTIAL EBAY DEAL ASIDE. GAMESTOP IS STILL ONE OF THE BIGGEST NAMES IN GAMING. IF YOU ARE UP FOR IT, LET'S START WITH GRAND THEFT AUTO 6. IT IS EXPECTED WHAT ARE YOU SEEING? WHAT ARE CUSTOMERS TELLING YOU? RYAN: I WANT TO GO BACK AND TALK ABOUT EBAY. IF YOU WANTED TO BUILD A $1 TRILLION BUSINESS AND YOU HAVE THE EXISTING MANAGEMENT TEAM, THE GUY RUNNING IT MAKES $30 MILLION A YEAR, HAS NOT BOUGHT A SINGLE SHARE, AS SOMEONE WHO HAS COMMITTED $500 MILLION -- ME -- DO NOT HAVE TO TALKING HYPOTHETICALS, WHO IS MORE CAPABLE OF BUILDING A BUSINESS? I WANT TO LOOK YOUR VIEWERS IN THE EYES AND TELL THEM, ARE YOU GOING TO BET ON AN ENTRENCHED MANAGEMENT TEAM RUNNING THE BUSINESS OR ME? I WENT HEAD TO HEAD AGAINST AMAZON SELLING 30 POUND BAGS OF DOG FOOD, TURNED AROUND A TOUGH SITUATION AT GAMESTOP ANOTHER COMPANY IS MAKING A LOT OF MONEY. ED: RYAN, I'M NOT HERE TO ANSWER THE QUESTION. THE AUDIENCE DOES NOT CARE WHAT I THINK ABOUT THIS DEAL. THEY ARE HERE FOR YOU. THE LINK TO GRAND THEFT AUTO 6, 00 STORE STOP PASS 2200 STORES. YOU NEED TO HIRE PEOPLE FOR THOSE STORES. PEOPLE ARE LOOKING AT WHAT THEY KNOW ABOUT THE PROPOSED STRUCTURE OF THIS DEAL AND TRYING TO UNDERSTAND IN PART ABOUT TAKING THE COSTS OUT OF THE COMBINED BUSINESS AND TO UNDERSTAND THE MASTER PLAN FOR THE COMBINED ENTITY. WHAT IS THE PLAY BETWEEN EBAY, THE E-COMMERCE BUSINESS, AND GAMESTOP WHICH IS A BRICK-AND-MORTAR BUSINESS SELLING VIDEO GAMES, CONSOLES, COLLECTIBLES? RYAN: WE ARE GOING TO UNLOCK LIVE COMMERCE, USE THE STORES FOR SAME-DAY AUTHENTICATION. LET'S TALK ABOUT TRADING CARDS. THE BIGGEST ISSUE ON EBAY IS FRAUD. THEY HAVE DONE REALLY WELL ON AUTHENTICITY GUARANTEE. WHEN YOU BUY AN ITEM AND IT HAS TO AG CERTIFICATION, IT IS LEGIT. IT IS GOING THROUGH A CENTRALIZED MODEL. A SELLER IS SHIPPING IT, IT COSTS A LOT OF MONEY. THERE ARE FULFILLMENT CENTERS, IT TAKES TIME AND GOES TO THE BUYER. ONCE THESE BUSINESSES ARE TOGETHER, WE HAVE 1600 WITHIN A 15-MINUTE DRIVE OF 80% OF THE POPULATION AND YOU CAN AUTHENTICATE THE PIECE FOR CHEAPER. LIVE COMMERCE IS A $1 TRILLION MARKET, IT IS REALLY BIG IN ASIA. THERE ARE COMPETITORS IN THE U.S. DOING VERY WELL. THE ABILITY TO USE OUR NODES AS STUDIOS AND FULFILLMENT AND LOGISTICS FOR CONTENT CREATORS IS HUGE. WE HAVE EXPERIENCE IN GAMING WHEN IT COMES TO THE BUY, SELL AND TRADE MODEL. TO USE EBAY'S RAILS TO BUILD OUT A MARKETPLACE IS HUGE. THOSE ARE SOME OF THE OPPORTUNITIES TO TAKE THIS BUSINESS AND BUILD IT INTO SOMETHING THE EXISTING MANAGEMENT TEAM ON A STANDALONE BASIS CAN NEVER DO. ED: THE SITUATION IS COLLECTIBLES ARE A CLEAR CENTRAL PART OF THE PLAN IF THE DEAL GOES THROUGH. ON GAMING, IT SOUNDS LIKE YOU ARE PREPARING FOR A WORLD WHERE GAMING IS DISKLESS. THIS IS THE UMBRELLA POINT. IF THE HARDWARE MAKERS -- SONY, XBOX -- ARE MOVING TO DISKLESS, FUTURE GAME LODGES ARE DIGITAL ONLY, WHERE DOES THAT FIT IN FOR THE BUSINESS PLAN? RYAN: IT DOES NOT MATTER. IT DOES NOT MATTER AT ALL. SOFTWARE -- IT MATTERED IN THE PAST -- SOFTWARE TODAY MAKES UP LESS THAN 12% OF THE BUSINESS AND COLLECTIBLES MAKES SOME MORE THAN HALF OF THE BUSINESS. IT IS TOTALLY, TOTALLY IRRELEVANT. ED: IS THERE ANYTHING YOU LEARN FROM THE NFT MARKETPLACE EXPERIMENT AT GAMESTOP THAT YOU THINK YOU CAN PUT INTO PRACTICE IF THE DEAL GOES THROUGH IN THIS COMBINED ENTITY? WHAT WAS THE TAKE AWAY FOR YOU? RYAN: WHAT DOES THAT MEAN? ED: GAMESTOP HAS LOOKED AT DIGITAL BUSINESS LINES OUTSIDE OF THE PHYSICAL WORLD. WHAT HAVE YOU LEARNED FROM GAMESTOP LOOKING AT THOSE MARKETS? RYAN: YOU KNOW HOW MUCH MONEY GAMESTOP IS MAKING TODAY? ED: PLEASE. RYAN: $143 MILLION IN Q1, HIGHEST IN HISTORY. ED: THERE WAS SURPRISE WITH THE STRENGTH OF EARNINGS. RYAN: EVERYBODY IN THE MEDIA WANTS GAMESTOP TO FAIL. EXPLAINED THAT -- THERE IS NOTHING MORE AMERICAN THAN THIS COMPANY, A GREAT AMERICAN COMPANY, EBAY, BEING ALIGNED WITH SHAREHOLDERS. THAT IS HOW THIS COUNTRY WAS BUILT. IT IS RISKING YOUR OWN CAPITAL. IF THE BUSINESS ASSOCIATES, YOU MAKE MONEY. IF THE BUSINESS FAILS, YOU LOSE A LOT OF MONEY. WHAT I WANT TO UNDERSTAND IS WHY EVERYBODY WANTS GAMESTOP TO FAIL. WHAT WORLD WE LIVE IN WE ARE BETTING AGAINST IT -- WE ARE ROOTING FOR AN ENTRENCHED MANAGEMENT TEAM WITH NO SKIN IN THE GAME. YOU WANT US TO FAIL. ED: I AM A TECHNOLOGY JOURNALIST. WHEN THIS DEAL BROKE IN MAY, I AND MY TEAM INVITED YOU ONTO THE SHOW AND IT TOOK A NUMBER OF MONTHS. YOU ARE NOW HERE ON THE SHOW. IN ADVANCE OF YOU COMING ON THE SHOW, I POSTED ON SOCIAL MEDIA YOU WERE COMING ON THE SHOW. I ALWAYS GIVE THE AUDIENCE A CHANCE TO ASK QUESTIONS. THAT IS WHAT WE ARE DOING HERE. PEOPLE ASKING, WHEN WILL THEY SEE A CODIFIED PLAN FROM YOU? A BUSINESS PLAN PRESENTED FOR THIS COMBINED ENTITY? IN THE COURSE OF THIS CONVERSATION. THAT IS WHY THE AUDIENCE IS HERE. TO HEAR YOU EXPLAIN THE FUTURE OF THE BUSINESS. A COMBINATION OF GAMESTOP AND EBAY. RYAN: I WILL BRING THAT PLAN DIRECTLY TO SHAREHOLDERS. IT WILL NOT BE THROUGH A TV SHOW. IT WILL BE DIRECTLY TO SHAREHOLDERS. ED: DO YOU HAVE A TIMELINE FOR THAT? RYAN: WE HAVE HAD AN INFLUX OF PARTIES WHO HAVE COME TO US AND THEY ARE INTERESTED. IN DUE COURSE, THE PLAN WILL BE MADE PUBLIC. BUILDING A MUCH LARGER -- WHAT IS THE GOAL OF BUSINESS? WHAT IS MY GOAL? I OWN A LOT OF STOCK DO NOT HAVE PERVERSE INCENTIVE. IT IS TO MAKE THE BUSINESS MORE PROFITABLE. IT IS NOT THAT COMPLICATED. I HAVE SPOKEN ABOUT HUGE GROWTH AREAS ABOUT CUTTING COSTS. THAT IS JUST SHORT-TERM. LIVE COMMERCE AND BUILDING OUT AN IN-GAME DIGITAL MARKETPLACE. EVERYONE IN THE PAST SAID, WHAT IS THE BUSINESS PLAN? THE ONLY DO THAT WITH GAMESTOP, FOR WHATEVER REASON? YOU KNOW WHAT THE BUSINESS PLAN IS? TO MAKE MONEY. GAMESTOP JUST REPORTED ITS HIGHEST EARNINGS IN THE COMPANY'S HISTORY WITH A FRACTION OF THE STORES. EVERYBODY IN THE MEDIASET GAMESTOP WAS GOING TO FAIL. THE PLAN IS TO MAXIMIZE SHAREHOLDER VALUE. AM I GOING TO GO AND SHARE MY PROPRIETARY PLAN AND EVERY SINGLE DETAIL AND GIVE IT UP TO MY COMPETITORS? THAT WOULD BE A PRETTY STUPID THING TO DO. ED: WE HAVE LITERALLY 30 SECONDS LEFT IN THE SHOW. AGAIN, ARE YOU PREPARED TO RAISE YOUR OFFER FOR EBAY? THE ACTION YOU ARE WILLING TO TAKE TO DO IT? RYAN: I AM NOT GOING TO CALL MY SHOT BUT WE ARE COMING FOR EBAY ONE WAY OR ANOTHER. ED: 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." RECAP THE CONVERSATION AND THE OTHERS. . YOU KNOW WHERE TO FIND THE PODCAST. FROM SAN FRANCISCO, THIS IS "BLOOMBERG TECH." ♪