TSMC Slides, Saronic Invests in Texas, GameStop Makes Its Move

Summary

Bloomberg Tech — July 16, 2026

Episode: TSMC Slides, Saronic Invests in Texas, GameStop Makes Its Move

Host: Ed Ludlow
Guests: Mike Shepherd (Bloomberg Senior Tech Editor), Tammy Chu (Berenberg), Dino Mavrukas (CEO, Saronic), Governor Greg Abbott (Texas), Ryan Cohen (CEO, GameStop)

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Episode Overview

This episode dives deep into three of the day's biggest tech-business stories: TSMC’s ambitious U.S. expansion and its impact on markets, Saronic’s $3.2 billion investment in Texas shipyards, and GameStop’s bold $56 billion bid for eBay. Ed Ludlow navigates the nuances of chip industry shifts, industrial innovation in Texas, and strategic transformation in gaming and e-commerce, bringing in industry leaders and key figures for unfiltered insights.

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1. TSMC’s Massive U.S. Investment and Tech Market Volatility

Key Points & Insights

• TSMC Earnings and Spending

  • TSMC announced strong quarterly results, raising its sales outlook and increasing capital expenditures not just for the year, but for at least three years ahead. (01:52–03:34)
  • Total planned U.S. investment rises to $265 billion, with an additional $100 billion for four new semiconductor fabs in Arizona. This is part of a strategy to diversify away from Taiwan and address U.S. political pressures.

• Market Reaction

  • Despite earnings beats, the announcement of higher spending led to underperformance in semiconductor stocks. Markets are recalibrating expectations around AI-fueled capex and its impact on valuations. (01:52–03:34)

• Bloomberg's Mike Shepherd on Geopolitics and Costs
  “It takes a long time to construct these facilities and really an even longer time to actually start production and delivering... It is a huge commitment, and it was driven in part by the Trump administration’s pressure on Taiwan with tariffs.” (03:34–04:46)

• Rationale for U.S. Expansion

  • Persistent memory shortages, surging AI demand, and political motives are driving TSMC to further invest in the U.S. and hedge against Asia-centric supply chain risks.
  • “TSMC is looking to diversify geographically out of Taiwan ... as a hedge geopolitically, but also to serve the U.S. customer base more.” –Mike Shepherd (05:04–06:15)

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2. Semiconductor Equipment Ecosystem: ASML and Market Cycles

Key Points & Insights

• ASML’s Strong Quarter

  • ASML, critical chipmaking equipment supplier, lifted its sales and gross margin guidance for the second time this year, reflecting persistent, growing demand for both logic and memory sectors. (08:18–09:50)

• Tammy Chu, Berenberg, on Industry Momentum

  • “From my perspective ... the whole investment capex expansion capacity addition is not coming to an end at any time.” (08:42–09:50)

• Cyclical Risks and Supply Chain Management

  • ASML remains cautious in growing capacity, balancing customer demand against potential downturns: “None of the equipment companies want to drive on those empty capacity through the downturn.” –Tammy Chu (10:21–11:26)

• U.S. Share of Equipment Shipments

  • Shift in regional deliveries expected as TSMC and Samsung ramp up U.S. fab investment, with sales patterns expected to be “lumpy” quarter to quarter. (11:26–12:36)

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3. Saronic’s $3.2B Texas Shipyard for Autonomous Vessels

Key Points & Insights

• Investment Announcement

  • Saronic, an autonomous maritime drone company, will invest $3.2 billion to build a next-gen shipyard in Brownsville, Texas, focused on medium to large class surface vessels. Expected to create 10,000 jobs with a $160 billion economic impact over the next decade. (13:20–19:11)

• Why Texas?

  • Deep water access and available land were critical, but "the workforce... was the tipping point." –Dino Mavrukas (17:33–18:18)
  • Governor Abbott touts Texas as “number one in the U.S. for workforce” due to its integrated educational and technical training infrastructure. (19:24–20:47)

• Transformation of the Rio Grande Valley

  • Historically agricultural, the region is now poised for explosive growth due to SpaceX, Saronic, and education investments. “It’s going to be one of the fastest-growing regions... [with] $750 million in paychecks for our fellow Texans.” –Governor Abbott (20:54–22:48)

• National Security and Industrial Strategy

  • Saronic’s tech was recently deployed in the first combat use of autonomous surface vessels by the US Military. Mavrukas highlights the critical need:
    “China outbuilds us 30 to 1. Our naval fleet is actually shrinking... Port Alpha is going to turn all that around.” (23:07–24:25)
  • Phase one is just the start—expandable from 835 to over 4,000 acres, aiming to add “brand new shipbuilding capabilities... not seen since World War II.” (24:35–25:11)

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4. GameStop’s Bid for eBay — Ryan Cohen’s Vision

Key Points & Insights

• The Bid and Market Reaction
  • GameStop, led by Ryan Cohen, launched a $56 billion unsolicited bid for eBay, rejected by eBay as “neither credible nor attractive.” Since then, GameStop scrapped Cohen’s pay package and increased its authorized share count for deal flexibility. (27:29–29:21)

Ryan Cohen’s Strategic Rationale (29:21–30:34)

• “My track record, Chewy and GameStop... speaks for themselves. My alignment with shareholders—I’m putting $500 million of my own money into this transaction.”

• Sees tremendous high-margin growth in Live Commerce, leveraging GameStop stores as local nodes for marketplace and authentication.

• Plans to pull $2 billion in costs from eBay, transforming the company structure.

• Financing and Deal Mechanics

  • “We have a highly confident letter from our bankers...The most important thing: If we can’t get the debt, eBay can't get the debt.” (31:13–31:38)
  • Pro forma company, per Cohen, “is going to be investment grade.” (32:04–32:15)

• Addressing Shareholder Concerns

  • On dilution: “If you do the math... buying a business for 56 billion and the business is forecasted to make over three and a half billion... plus what I would be pulling out in cost, so you’re at over five and a half billion of EBITDA... the upside is huge.” (33:13–34:35)

• Engagement with eBay

  • “No [response from eBay]. I hope they do, but they’re entrenched and they’re hiding behind their advisors.” (35:21–35:29)
  • On raising the offer: “I’m not going to negotiate against myself.” (37:22–37:31)
  • On next steps: “Ultimately, it’s going to be the owners of the business that are going to decide who is more competent, more aligned with shareholders.” (37:49–38:28)

Integration Vision and GameStop’s Transformation (42:28–44:55)

• “We are going to unlock live commerce. We’re going to use stores for same day authentication... There’s such overlap... and my experience is in e-commerce.”

• “Collectibles makes up over half the business. So [digital only games] is totally, totally irrelevant.” (44:55–45:13)

• Media and Market Skepticism

  • “Everybody in the media wants GameStop to fail... There’s nothing more American than GameStop committing its balance sheets... risking your own capital.” (45:55–47:08)

• Business Plan Disclosure

  • “I’m going to bring that plan directly to shareholders. It’s not going to be through a TV show, you can count on it.” (48:00–48:12)
  • “The plan is to make more money. The plan is to maximize shareholder value... Am I going to go and share my proprietary plan... that’d be a pretty stupid thing to do.” (48:29–49:49)
  • “I’m not going to call my shots, but we’re coming for eBay one way or another.” (50:02)

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Notable Quotes & Moments

• “There is so much need for chips and processors to go into all those AI data centers being built across the U.S. and elsewhere in the world.”
  –Mike Shepherd, Bloomberg (05:04–06:15)

• “TSMC is looking to diversify geographically out of Taiwan... in part as a hedge geopolitically, in part because yes, it does need to serve the U.S. customer base more.”
  –Mike Shepherd (05:04–06:15)

• “Our naval fleet is actually shrinking... Port Alpha is going to turn all that around... Our initial phase of the project will have 1.5x the commercial shipbuilding capacity in the U.S., and that’s just phase one.”
  –Dino Mavrukas, Saronic CEO (23:07–24:25)

• “If you do not need to be out, don't go out. There's an old saying, turn around, don't drown, and that applies here.”
  –Governor Greg Abbott (15:50–16:45; local response to flooding)

• “My track record, Chewy and GameStop ... speaks for themselves. My alignment with shareholders—I’m putting $500 million of my own money into this transaction.”
  –Ryan Cohen, GameStop (29:21–30:34)

• “Everybody in the media wants GameStop to fail... There’s nothing more American than GameStop committing its balance sheets... risking your own capital.”
  –Ryan Cohen (45:55–47:08)

• “I’m not going to call my shots, but we’re coming for eBay one way or another.”
  –Ryan Cohen (50:02)

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Timestamps for Important Segments

• TSMC Market Impact & Spending: 01:52–06:15
• ASML & Semiconductor Equipment Deep Dive: 08:18–12:36
• Saronic’s Texas Shipyard: Strategy, Workforce, National Security: 13:20–25:11
• Ryan Cohen on GameStop’s eBay Bid: Strategy & Financing: 27:29–38:59
• GameStop's Transformation & Media Critique: 40:34–49:49

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Tone and Style

The conversation is direct, brisk, and sometimes confrontational—especially during Ryan Cohen’s interview, marked by his trademark confidence and repeated challenges to media narratives and market skepticism, while the earlier segments maintain Bloomberg’s analytical, business-focused tone.

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This episode is a must-listen for anyone tracking the industrial and strategic shifts in global tech, the evolution of high-growth regions in the U.S., and the drama of activist capitalism in the gaming and e-commerce sector.

Transcript

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[Ed Ludlow]

This is Bloomberg Tech. Coming up, US equity markets drop after TSMC results topping expectations but also spending more to meet air related demand, including a bigger commitment to its U.S. build out. Saronic 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 quality 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. Underperformance in chip stocks for what it's worth. TSMC sees US listed shares, the ADRs, they've kind of off session lows that we are markedly now lower. That takes us to Today's big number, $265 billion. That's the total value of TSMC's planned US investment after the chip maker added another $100 billion for just four new semiconductor fabs. Bloomberg Senior Tech Editor Mike shepherd has more. $100 billion is a lot more, but it's for just four fabs. That's the reality of the economics of building out infrastructure. What do we need to know about this?

[Mike Shepherd]

Well, 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 an even longer time to actually start production and delivering. They began production at the 4 nanometer process level back in 2024, and the 3 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 something 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 hundred billion to it.

[Ed Ludlow]

That's the bit I'm kind of interested in. Right. 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?

[Mike Shepherd]

Well, in part because if you look back at CEO CC Way'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 U.S. customers. And that's really true across the board. You also heard that in your conversations with the CEO of SK Hynix 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 go into all those AI 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 be made someplace TSMC is looking to diversify geographically out of Taiwan where it principally makes 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 recognize that the political pressure here in Washington to expand and invest not only in Taiwan but other major economies is very strong.

[Ed Ludlow]

At Bloomberg's Mike Shepard, thank you very much. Let's get more on TSMC results and bring in Tammy Chu, Berenberg'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.

[Tammy Chu]

So from the 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. TSMC caught today that the industry is new and demand will go all the way into 2029, 2030 which is a positive sign in my view for the semi equipment industry.

[Ed Ludlow]

Tommy, we're going to get to ASML in just a moment. Pretty much the critical key chip equipment name but the reaction of US Equity markets to TSMC saying not to 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. Why is that a negative in the first instance?

[Tammy Chu]

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 the investor expectation has been increasing dramatically. So in our view it just take a brief and also 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 trade. So in our view it would just be a short term profit taking sort of anything fundamentally went wrong.

[Ed Ludlow]

Let's go to asml. We didn't have a show on Tuesday and Wednesday of this week because of Fed Chair Wash's test 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 energy side Just your overall reaction to what ASML said.

[Tammy Chu]

ASMR's earnings yesterday has been amazing in terms of how they revised up the full year guidance for the second time this year as you suggested. Besides the revenue, I would point out, ASIMO also revised up the gross margin expectation for this year from midpoint 52% to midpoint 55% which all suggesting that ASMR is seeing incremental demand coming from their customers and customers 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 investment capex expansion capacity addition is not coming to an end at any time. And the share price move of yesterday from ASMR side is very similar to the logic of tsmc. The share price has done really well over the past three months. Expectation has been high, so we are taking a little pause. But we do believe that the results yesterday of ASMR has been very strong and showing the level of customer spending is only going up.

[Ed Ludlow]

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 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?

[Tammy Chu]

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 drive on those empty capacity through the downturn as you suggested. So we believe that ASMR 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 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 growth, the 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 supply chain is under shortage. So therefore we believe that ASMR has been speaking to customer understand the requirements and building for both of the sectors in order to fulfill more incremental demand in the coming years.

[Ed Ludlow]

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. Much. 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 increased commitment to the United States. Do you expect over time more ASML equipment to come here to America?

[Tammy Chu]

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 U.S. with TSMC expanding further in the U.S. with incremental commitment, we do believe that U.S. sales will increase on a 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 it just lumpiness of the factor of the equipment. Given that ASMR's equipment is sold for more than 200 million equipment. So therefore who receives what really moves the quarterly trend.

[Ed Ludlow]

Tommy Chu, Berenberg's head of tech research. Great to have you back on Bloomberg Tech. Thank you very much. As the world gears up for a big earnings season, one of the industry's key figures was spotted enjoying pork skewers in Tokyo. Nvidia CEO Jensen Huang enjoyed the finger food alongside Japanese support suppliers to court their support for the supply chain. Those present included executives of companies like Kyosha and Tokyo Electron, both of which supply essential components from videos AI systems. Not only that, Japan is planning to purchase 27,500 next generation Ruben chips to build an AI for robots. Okay, coming up, Saranic makes a $3.2 billion bet on Texas. We speak with Dino Mavruk as Sironic CEO and Texas Governor Greg Abbott. This is Bloomberg Tech. Texas is quickly becoming the epicenter of America's next industrial buildout. Out from AI data centers and semiconductor fabs to defense technology. Now autonomous shipbuilder Saronic is making its own major bet on the state. The company's announced a $3.2 billion investment building a next gen shipyard at the port of Brownsville manufacturing medium to large class autonomous surface vessels. Joining us now for an exclusive conversation are Saronic CEO Dino Mavrukas and Texas Governor Greg Abbott. Abbott alongside our Bloomberg Texas bureau chief Judy Fine. Governor Abbott, good morning to you from San Francisco. If we could, I'd like to start with a sort of operational update please on the flooding situation in your state. I know it's something that you want to communicate on.

[Greg Abbott]

Sure. Listen. Well, thank you for offering that up. We've been following all day yesterday, all last night and today, the massive 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 difference this year is we're actually getting more rain over the past 20 hours and over the next 24 hours than we got last year. Overnight, there was one life lost. We are continuing to surge resources. We've made almost 80 rescues already. I will be leaving here after this interview to go focus on our current response in regions ranging from the Kerrville area all the way down to Uvalde to Del Rio to Laredo, where we expect continued flooding. I just want to make sure that all Texans know that we have more than 1,300 Texas personnel, the National Guard, Texas Department of Public Safety. We have all resources, boats, helicopters available to make sure that we will be doing everything possible to save human life.

[Karen Moscow]

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?

[Greg Abbott]

So, great, great question. And you all are one of the best communicators to the general public that we can have out there where with the news media sharing what I'm about to tell you, and that is 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 in rising waters like this is because people drive into waterways and get swept away. There's an old saying, turn around, don't drown, and that applies here. Second, because rivers are rising so rapidly, if you are near a river, try to get away from that river so you can protect your own life. Each individual instead of Texas, has a full capability of protecting and saving their own life right now by staying away from the rising rivers and not driving into it.

[Ed Ludlow]

Governor Abbott, thank you very much for that. As a reminder to Bloomberg Tech audience Saronic, 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 Maverick is Sironic 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

[Dino Mavrukas]

before? Before I even talk about that, I just want to say our thoughts and prayers go out to everybody involved in the flooding. Sarana 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.

[Greg Abbott]

Sure. Thank you.

[Dino Mavrukas]

Texas is a great state. I mean, the leadership and the partnership with the governor. 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, it's the governor's leadership and support the partnership with the state, Cameron county and the city in the port of Brownsville that help bring this generational project to life.

[Ed Ludlow]

Dino, Brownsville, close proximity to SpaceX. So that was interesting. The workforce was, was, was the tipping point. How competitive is it in your industry right now in hiring the best people across lots of different disciplines?

[Dino Mavrukas]

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 Space X and others doing that, it creates an entire ecosystem, not only in that part of the state, but in the entire state.

[Karen Moscow]

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.

[Greg Abbott]

I'll tell you this. That is set. 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 work more than any other state to make sure we have the best trained and qualified workforce. We have these massive education programs across the state. One is through the Texas State Technical college. Two is through our two year colleges, but three is through our universities. And we focus our education in Texas on real life job skills 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 talked to Denna, we talked to Sironic about what our capabilities are to make sure that we would be able to develop the workforce they need. This is exactly what Elon Musk found with regard to SpaceX is what other companies are coming to the state of Texas are realizing. I talk to these CEOs all the time, they're coming to the state of Texas and they tell me the leading reason why they're coming to the state is because we do have that pipeline of well trained workforce and we will be able to deliver it for Saronic 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, because in part of the workforce and supply that we have.

[Karen Moscow]

Governor Abbott, when you look down the road five years, what is the Rio Grande Valley look like with this addition?

[Greg Abbott]

So it has changed dramatically. You're familiar with it. Maybe many Americans watching this show may not be familiar with it. But listen, the Rio Grande 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 in Cameron county, which is near the Brownsville area, with Saronic, which is going to be near the Brownsville area, the is a massive explosion of economic activity. And because of that kind of going back to the education component, what our universities are doing, our universities are establishing campuses and expanding campuses in those regions to make sure that we will be educating students not just to be able to go to work for Sironic, but also to fill the other education needs in the entire area. But going back now, 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 building out transportation facilities, other facilities to make sure this is going to be a thriving community. But also 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 with the booming Dallas and Austin and Houston areas. But now we have the booming Rio Grande area. And so our state is absolutely booming. And we cannot be more proud to have Saronic down there and the jobs are providing. So get this real quick number over the, over the Course of the coming years, Veronica is going to be adding more than or up to at least 10,000 new jobs at $75,000 per job, at least. When you put it all together, they're going to be injecting $750 million in paychecks for our fellow Texans. That's going to make a massive difference in our state.

[Ed Ludlow]

Dino, we're going to put up. You know, let me just jump in, because there's another big moment this week for you, centcom, 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?

[Dino Mavrukas]

I mean, it's delivering the capabilities to our warfighters at speed and scale. That's what Saronic 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, actually exactly what we're doing in Brownsville as well. There's a shipbuilding crisis in this country right now. China outbuilds US230 to 1. Our naval fleet is actually shrinking. We have 0.1% of global shipbuilding capacity. Port Alpha is going to turn all of that around. Around on day one. Our initial. Our initial phase of the project, this will be the largest shipyard in the country. We will have 150,000 gross tons of shipbuilding capacity, which means we will 1.5x the commercial shipbuilding 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, capacity in this country. And that's what we need. And in Brownsville, what you're going to see is the development with Space X already being there. It's just going to become a critical corridor not just for business and commerce, but for national security.

[Ed Ludlow]

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?

[Dino Mavrukas]

Absolutely. So basing the first, 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 shipbuilding capabilities to this country in a way that we haven't seen since World War II.

[Ed Ludlow]

Texas Governor Greg Abbott, Saronic CEO Dina Mavrukas, of course, our Texas bureau chief, Julie Fine. Really appreciate all of your time this morning again. Saronic, a $3.2 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. 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, 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 highest 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.

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[Ed Ludlow]

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Hotspan, yes. So millennial men, you have to stay hot for like several more decades.

[Dino Mavrukas]

David.

[Ed Ludlow]

Okay, so you need to work on this.

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[Karen Moscow]

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[IDA Ireland Representative]

nice telling me that the Bloomberg this Weekend podcast. Subscribe today on Apple, Spotify or wherever you listen.

[Ed Ludlow]

Welcome back to Bloomberg Tech. Chip stocks are dragging the market lower. TSMC US listed shares are off session lows, but lower. The world's biggest contract manufacturer for chips ships 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 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 billion USD in euro terms, €41 50, 50 cents 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 Eco 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 multibillion 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?

[Ryan Cohen]

There has been a, 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 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. 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

[Ed Ludlow]

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 worth worthiness 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 credit negative outlook would be for a combined entity based on the plan that you've just outlined.

[Ryan Cohen]

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 its entire narrative is simply not true.

[Ed Ludlow]

I didn't explain that question very well, Ryan, if I'm self reflective, honest about it. So I'm just going to go back to it. Your financing letter is from tv, 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?

[Ryan Cohen]

Nobody has reached out to us, including the credit agencies. But the pro forma company is going to be investment grade.

[Ed Ludlow]

We talked to the beginning of the conversation about shareholders improving, increasing, Sorry, 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?

[Ryan Cohen]

Yeah, I mean we. Yes, it does.

[Ed Ludlow]

And what would that be

[Ryan Cohen]

by the business, by ebay?

[Ed Ludlow]

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 shareholders sent to me over and over again is, you know, you're asking them to accept pretty significant dilution and they're basically asking like what's the payoff for them in accepting that dilution.

[Ryan Cohen]

There's different forms of dilution. Most dilution is dilutive to shareholders when you're buying a business and I've committed to, to pulling $2 billion of costs out. So if you do the math and buying a business for 56 billion and the business is forecasted to make over three and a half billion, that's, that's the consensus for 20, 26 plus what, what I would be pulling out in cost. So you're at over five and a half billion of EBITDA and then the ability to take this platform and build a much, much larger business and 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.

[Ed Ludlow]

You have the letter from TD. 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?

[Ryan Cohen]

We've had a lot of parties come to us and there's been a lot of interest from the capital markets.

[Ed Ludlow]

We're live on Bloomberg Television and Bloomberg Radio with ryan Cohen, the CEO 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, reached back out to you or responded to you in this interim period?

[Ryan Cohen]

No. I hope they do, but they're entrenched and they're hiding behind their, their advisors.

[Ed Ludlow]

If I go to teddy.com on any browser I'm diverted back to gamestop.com why

[Ryan Cohen]

I'm focused on GameStop.

[Ed Ludlow]

The root of the question is let's say that you proceed with this. There's a very wide range 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 bigger plan, a master plan. You kind of talked about it a little bit earlier year 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 a sort of conglomerate, a holding company.

[Ryan Cohen]

If 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 to 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.

[Ed Ludlow]

Right. Are you improved prepared to improve the offer? Ryan?

[Ryan Cohen]

I'm not going to negotiate against myself

[Ed Ludlow]

but that might be what it takes.

[Ryan Cohen]

We'll see what happens.

[Ed Ludlow]

That 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?

[Ryan Cohen]

Ultimately, it's going to be the owners of the business that are going to, to decide who is more competent, who's more aligned with shareholders and who is more capable of building a much, much larger business. So the management team can only fight 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 Ludlow]

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 promised I would put to you, and it's from GameStop shareholders. A lot of GameStop shareholders have asked, 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?

[Ryan Cohen]

I don't have a crystal ball. I can't answer that question.

[Ed Ludlow]

Okay. Their expectation is that when they expire, I think the dates October 26th, that's the outcome.

[Ryan Cohen]

And people that have invested alongside me when it comes to Chewy or GameStop and me committing $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

[Mike Shepherd]

was

[Ryan Cohen]

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.

[Ed Ludlow]

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, so one of the biggest names in gaming. I get a lot of questions about that. And Ryan, 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 saying? What are customers telling you?

[Ryan Cohen]

And 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 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 might me very. So 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 head to head against Amazon selling 30 pound bags of dog food, turned around a very tough situation at GameStop and now the company is making lots of money. I really want to know your opinion, Ryan.

[Ed Ludlow]

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, console 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 we 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 the synergistic play here between ebay, the e commerce business and GameStop which right now is a brick and mortar business selling video games, consoles, collectibles.

[Ryan Cohen]

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, take some time and then it goes to the buyer can ultimately go once these businesses are together. We've got 1600 nodes, they're within a 15 minute 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 $1 trillion addressable market. It's really, really big in Asia. There's some competitors in the US that are doing very well, 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.

[Ed Ludlow]

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 diskless. There will be a trade in, second hand trade in. But this is the umbrella point, right? Like if the hardware makers Sony Xbox are reportedly moving to disk list on the console side, future game launches are digital only. Where does that fit in for you, your business plan and the combined entity?

[Ryan Cohen]

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.

[Ed Ludlow]

Is there anything that you Learned from the NFT Marketplace experiment at GameStop that you, you think you can put into practice? If the deal goes through in this combined entity, what was the takeaway for you from that?

[Ryan Cohen]

What does that mean?

[Ed Ludlow]

GameStop has looked at digital business lines outside of the physical world. What did you learn from GameStop looking at those markets?

[Ryan Cohen]

You know how much money GameStop is making today? Face 143 million in Q1 highest operating earnings in the company's history.

[Ed Ludlow]

There was surprise at the strength of earnings recently, but again, you know the

[Ryan Cohen]

audience, everybody in the, everybody in the media wants GameStop to fail. Explain that to me and why everybody in the media in the mainstream Media wants to GameStop to fail. You've got. There's nothing more American than GameStop committing its balance sheets. 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'll 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 where 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.

[Ed Ludlow]

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 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'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.

[Ryan Cohen]

Well, I'm going to bring that plan directly to shareholders. It's, it's not going to be through a TV show, you can count on it. It's going to be directly to shareholders.

[Ed Ludlow]

And do you have a timeline for that? Ryan?

[Ryan Cohen]

We've had an influx of parties that have come to ask and they're interested. And in due course the plan is going to be made public. But

[Ed Ludlow]

in the short term, I'm going

[Ryan Cohen]

to ask you, building a much larger business, I mean, you know, 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 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'd be a pretty stupid thing to do.

[Ed Ludlow]

Brian, we have literally 30 seconds left in the show again. Are you prepared to raise your offer for ebay? You set out your vision, but the action you're willing to take to do it.

[Ryan Cohen]

I'm not going to call my shots, but we're coming for ebay one way or another.

[Ed Ludlow]

Ryan Cohen, CEO of GameStop an extended conversation on Bloomberg Tech. Thank you for your time. So it does it for this edition of Bloomberg Tech. Recap that conversation with GameStop, Sierra, 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.