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they will be getting 20% more than what Ebay is worth today
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Once. Followed by a tank in price and descent into chaos.
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You can sell the stock. This isn't complicated.
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Selling is a taxable event
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Only for individuals, isn't it? Mutual funds etc don't have to pay CGT on everything, do they?
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Neither is ignoring the offer and continuing to hold, if you’ve already been in for two, five, ten, twenty or more years like some have been.
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Won’t eBay shareholders own most of the combined company though? They won’t all be able to exit at the sale price.
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I don’t understand either but wouldn’t they still be owning eBay? Just with GME?
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They own eBay + GME + some financial alchemy. If you aren't a financial wizard you should assume that the value of the financial alchemy is negative. (Because 99% of the time it is.) Now, what are the synergies of eBay + GME that outweighs the chaos caused by the merger and the finance stuff?
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I’m not totally sure how it would be structured but if GME is the purchaser then the merged company would be listed under GME and eBay would become a brand in the GME group and no longer a stock listed under the eBay ticker.

The whole thing seems incredibly dubious and fishy. The eBay board should vote this down which is why the CEO of GME has already realised that and said he’ll appeal to the shareholders directly. If eBay wanted to load themselves with twenty billion dollars of unnecessary debt and extra complications which would kill the company then they could do it themselves. They’re not in that kind of business.

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There is, literally, nothing fishy about this offer. It’s a cash and stock offer from a public company to public company shareholders. We could call the financial or shareholder benefits to ebay dubious (I don’t hold any opinion about this) but this is a very aggressive offer, and allows the chance for GME to keep some cash - if enough shareholders of ebay opt for stock, then they’ll have cash available after. Plus they’d keep whatever current net assets ebay has.

ebay was at like 100 before the offer went out, it’s trading up to 120 or so in early hours this morning, so speculators and institutional desks do not find this offer fishy or dubious - they are pricing it as likely to be pretty well received.

As a side note, one of many plays you might make in this situation is what Cohen has done here; they bought a bunch of options. Those options are now worth a lot; before the letter if it was all options, they controlled $2b of EBAY shares, today that’s $2.6b. We might imagine the options at least doubled the underlying return. The market had not priced in a rapid jump to $120 when he bought them. If the deal closes, then this will put at least another billion or two of liquid capital into GME.

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The end of your post negates the first line of it.
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Its just financial engineering.

But his mention that it is a form of options is laughable. Thats not what is going on here.

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TD Bank also believes it will work, i.e. return them a profit.

They've seen the detailed plans and I haven't. But they're the ones with real skin in the game. It seems like an opportunity for them to lose their shirts.

So yeah, eBay shareholders should take TD Bank's free money and run.

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TD Bank believes it will make them a profit. Their interests are not those of eBay’s shareholders: if they can juice the financials long enough to sell their loan, they don’t care if the company goes bankrupt the minute after that sale closes.
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Or ignore the free money/destroy company offer and hold.
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