Once there were companies that made things. Furniture, shoes, violins. Then there were companies that bought other companies. And of course there are companies that do both, one of the most famous of which is Warren Buffett’s Berkshire Hathaway. The $475bn conglomerate owns a collection of assets from insurer Geico to confectioner See’s Candies, and held its vaunted annual meeting over the weekend.
Many have tried to excel in this middle ground between running and buying businesses, with varying degrees of success. Usually, leading the charge, is a self-confident billionaire. Bill Ackman has a blank cheque vehicle that is trying to buy Universal Music Group at, it says, a €55bn valuation. Brad Jacobs, a serial US entrepreneur, helms QXO, a so-called roll-up company that has done $30bn of deals in the building products industry within the last year.
Now there is GameStop. The pandemic meme stock launched a takeover bid for online auctioneer eBay on Sunday for $56bn, in cash and stock. To the point about self-confident leadership being a common theme in such situations, GameStop — run by former petcare retail tycoon Ryan Cohen — has a $12bn market capitalisation, of which $5bn can be attributed to its net cash position. Cohen today runs a pile of cash more than a company.