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GameStop Makes $56 Billion Offer For eBay
Let the bidding begin // Illustration by Kate Walker
GameStop made an unsolicited $56 billion offer to take over eBay.
The Big Picture: GameStop CEO Ryan Cohen — a hero to the Reddit-powered retail-investor crowd — rode the meme-stock wave to revive the struggling game seller and steer it back toward its former glory. But his ambitions have always been much bigger, so setting his sights on eBay (which started with building a 5% stake in the company earlier this year) is part of his alleged master plan to turn GameStop into an Amazon competitor in the e-commerce space.
Behind The Offer: Can Cohen kick off another stonk surge with a bid for eBay?
Cohen’s offer — structured as 50% cash and 50% GameStop shares, with $20 billion in debt financing from TD Bank — values eBay at $125 per share, a 20% premium over its $46 billion valuation.
It’s a massive bid for a company valued at just $12 billion, with only $9 billion in cash on hand.
Pressed in an awkward interview about how he’d cover the gap, Cohen stayed coy, though a WSJ insider suggested he may tap Middle Eastern sovereign wealth funds.
While eBay said it would seriously consider the offer, Cohen warned he’d pursue a hostile takeover and take the bid directly to shareholders if it’s rejected.
Closing Thoughts: With an eBay acquisition, Cohen hopes to supercharge what both companies have recently pivoted toward — selling collectibles and other nostalgia-driven items. He’s floated the idea that GameStop’s physical stores could complement eBay’s e-commerce operation by transforming brick-and-mortar locations into places where customers can “collect and authenticate items from eBay sellers.” In that sense, it sounds more like GameStop would compete with StockX than Amazon.
Prediction: GameStop may not be able to pull off an eBay acquisition, but expect its stock to get a nice boost as fans rally behind it. Here comes GameStonk 2.0.
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Today’s email was written by David Vendrell.
Edited by Nick Comney. Polled and Copy-edited by Kait Cunniff.
Published by Darline Salazar.