"Hence, it's worth examining how the GameStop-eBay math resembles the AOL-Time Warner numbers. And how fundamentals like those for the both the 2000 wonder and its 2026 cousin, promise to doom any union from the start. GameStop would pay a giant premium for a high-flying stock, and mu"
Nasdaq valuations rose to unsustainable highs during the dot.com craze, and warnings pointed to an impending crash. AOL and Time Warner then announced a massive acquisition in which a young internet company bought a much larger media company at a multiple of its size, with the CEO explicitly accepting dot.com valuations. The deal became a symbol of extreme market irrationality and was later treated as a cautionary example. A later bid by GameStop to purchase eBay drew parallels to the earlier transaction, including motives tied to inflated stock and expectations of moonshot synergies. The comparison suggests that similar deal math and weak underlying fundamentals can doom such combinations from the start.
#mergers-and-acquisitions #stock-valuation #dot-com-bubble #corporate-synergies #market-fundamentals
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