GameStop rejected, a troubling loan trend, and no to pre-IPO AI shares

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0:11This is the Indicator from Planet Money. I'm Waylon Wong.

0:14Stacey Vanek Smith:I'm Darian Woods. And I'm Adrian Ma. And if all three of us are gathered here today, it can only mean one thing. Or maybe it means three things. In fact, Indicators of the Week. Week. Week! It is the day of the week when we talk about our favorite numbers from the news. And on today's episode, we're talking about... The GameStop and eBay romance that never was. People taking out personal loans just to pay the bills. And no, you cannot invest directly in OpenAI and Anthropic before they've gone public. Don't do that. This message comes from Insperity. providing HR services and technology from payroll benefits and HR compliance to talent development.

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1:57Stacey Vanek Smith:It's Indicators of the Week. Waylon Wong, you go first. My indicator is$55.5 billion. That is what the company GameStop offered to acquire eBay. It was an unsolicited offer. GameStop wanted to combine forces into a much bigger company, and it thought that, you know, there could be some benefits from eBay having physical locations. But this week, eBay rejected the offer. And I want to read from eBay's statement because you guys know I love romance novels. And eBay's response sounds like what a lady in a historical romance would say to, like, a rake who wanted to marry her. Okay. Wait, like the thing you clean up leaves with?

2:39No, a rake is like a historical romance term for like an incorrigible man. Okay. Okay. So eBay said to GameStop that its board, quote, has thoroughly reviewed your proposal and has determined to reject it. We have concluded that your proposal is neither credible nor attractive. Wow. Okay. No ambiguity there. Yeah, no, they're like, hate it. So eBay is a way bigger company than GameStop, right? I mean, does GameStop really have any shot at acquiring eBay? You're right. If you compare their market caps, eBay is around five times larger than GameStop. And so there was a lot of head scratching around this deal when GameStop announced it because GameStop was like, OK, we have$9 billion in cash.

3:26And then there's this bank that might give us another$20 billion in financing, although that's not finalized. And then even if you threw in all of GameStop's market cap, it actually would not be enough to get you anywhere near the$55.5 billion. So GameStop CEO Ryan Cohen went on CNBC and the anchor, Andrew Ross Sorkin, asked him about this math. And this happened.

3:52Stacey Vanek Smith:I'm just trying to understand where the rest of the money would come from. It's half cash, half stock. I hear you. I'm just saying that that math doesn't get you to the price that you're offering. Wow. There's nothing like math to really, you know, hold people account. No, there were many seconds of just dead air. It was incredibly awkward. And then finally, he's like, just check the website, which was not a very helpful response either. So arithmetic gets you every time. You know what else gets you every time is a really awkward appearance on CNBC because GameStop's stock went down 10 % after that happened.

4:38And then, yeah, and then eBay ended up rejecting the offer.

4:41Stacey Vanek Smith:All right. So what's next? Well, Ryan Cohen says GameStop already has a 5 % stake in eBay. So there could be some kind of proxy battle. This is this kind of situation where an activist shareholder tries to take control of a company. Those things are notoriously long and complicated. And so we'll see. But this has already been a very entertaining corporate story to watch. So in practical terms, I have about as much a chance of acquiring eBay as GameStop does. So you're saying there's a chance. Yeah. Yeah. I'll see you on CNBC, Adrian. You can explain where you got$56 billion from. Okay. Yeah. Speaking of needing cash, my indicator of the week comes from a couple of reports that actually spotlight a slightly troubling trend.

5:30So my indicator comes from new data from LendingTree, this website where people can go if they want to get a loan and compare offers from different lenders. So LendingTree puts out new data this week that says among people who use its website to find personal loans, 8.2 % of them say they're using the money to pay for everyday bills. And this is nearly two and a half times the rate it was back in 2023. So this is not someone who is taking out a personal loan for a huge unexpected expense or an emergency or a big project or something. It's just day-to-day stuff that they're having trouble paying for.

6:10Exactly. It could be, you know, stuff like food or gas or rent. And LendingTree says that the people who tend to take out these personal loans are younger, they have poorer credit, and it's a kind of particularly unappealing option because these rates can come with interest as high as 30 % or more. Ouch. Yeah. Also, what I thought was an interesting data point to pair with this LendingTree data was a report out this week by the New York Federal Reserve, which showed Americans are carrying greater credit card balances over the past couple of years. And most of that increase is actually among people who feel like they're just getting by or struggling financially.

6:51You know, what these reports are making me think about is we saw inflation start to kick up last month. And if that keeps going and wages don't keep up with inflation, we could see more of this. We could see more people carrying bigger balances on their credit cards and more folks who are taking out personal loans just to cover everyday bills. So I think definitely something to keep an eye on.

7:14Stacey Vanek Smith:Darian, bring us home. My indicator is a 40 % drop. That's roughly how much the tokens that claim they represent shares in their AI companies Anthropic and OpenAI plunged this week. The crash was because Anthropic and OpenAI announced that any unapproved transfers of its stock are invalid. Wait, so what were these tokens representing then? So this is all about everyday people trying to invest in Anthropik or OpenAI and finding ways to try to sneakily do it. The companies are saying that if you did it with some third party, then your investment could be zapped. Uh-oh. So people were thinking they got in on the ground level and that did not happen.

7:55Stacey Vanek Smith:Yeah, these are private companies, OpenAI and Anthropik. There is no public shares that you can buy. So they're not listed on the S &P 500. They're not listed on NASDAQ. you cannot buy shares in them. But that doesn't mean people will not try to buy shares, right? Like, why should private investors and venture capitalists make all the money from the AI boom? Yeah, people are so desperate for a slice of these AI companies that there's been a range of creative solutions. So one way is just to invest in a company that does have a lot invested in these private companies. So SoftBank is one. It's invested tens of billions of dollars in OpenAI.

8:32Stacey Vanek Smith:And to be clear, OpenAI is not saying you cannot buy SoftBank shares, but there are other dodgier ways of trying to get access to these private companies' shares. Oh, like what? What kind of schemes are we talking about? So there are entities that claim to have invested in private AI companies, and some of them sell tokens on the blockchain. Basically, I buy one Anthropic pre-stock token, and the entity claims that this will represent a share in Anthropic that they've privately bought. But then this week, Anthropic updated its investor web page to say, quote, any interest in Anthropic stock that has not been approved by our board of directors is void and will not be recognized on our books and records.

9:16Oh, so those people's money maybe just evaporated. Like they bought this token. The money changed hands. The token doesn't represent anything.

9:25Stacey Vanek Smith:It went down 40 percent at least. Oh, OK. completely. I mean, who knows what will actually happen, whether Anthropic and OpenAI will actually enforce this. It gets quite complicated, but it is certainly a warning and also a reminder that there are actually scams out there that don't even have investments in these companies. So buyer beware. You have been warned. Buy shares in GameStop instead. Just kidding, this show is not investment advice. This episode was produced by Angel Carreras with Engineering by Meg Luthor. It's fact-checked by Corey Bridges and Julia Ritchie. Kate and Cannon edits the show and The Indicator is a production of NPR.

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