The CEO of GameStop provided some details about the eBay deal to The Wall Street Journal.
GameStop CEO Ryan Cohen provided some details about the video game retailer’s proposed offer to acquire eBay. The executive has told The Wall Street Journal that the company has accumulated a 5 percent stake in eBay and is offering to acquire the e-commerce company for $125/share, a $56 billion valuation.
Source: u/ButtFarm69
GameStop has posted a press release about the offer to acquire eBay on its investor relations page.
In an exclusive interview with The Wall Street Journal, Cohen detailed the potential structure of the deal. He said that TD Bank has provided a commitment letter to provide approximately $20 billion in debt financing for this acquisition and that he would be looking to outside investors to make up for the rest of the funding. GameStop currently has $9 billion of cash and marketable securities on hand, so that leaves between $17-27 billion of additional funds required to acquire eBay at the proposed $56 billion valuation. This all depends on the structure of the deal.
Sources familiar with this deal tell WSJ that Cohen may reach out to Middle East sovereign-wealth funds to make up the gap in funding. “I’m thinking about turning eBay into something worth hundreds of billions of dollars, said the billionaire CEO of GameStop. He added that he believes he could build the combined entity into a “legit competitor to Amazon.”
GameStop is in the middle of a corporate turnaround which could be derailed by poor execution of such a massive acquisition. Cohen is motivated to hit stock-based compensation goals that could unlock a $35 billion payday if he can get GameStop’s valuation to hit $100 billion. With a market capitalization currently around $12 billion, it appears the former Chewy CEO is losing patience and is willing to take on a pile of debt to accelerate his company’s growth.
An acquisition of eBay may be the shortcut Cohen needs to unlock a massive payday, and could put the newly combined entity in a better space to compete in the e-commerce sector. The proposed $125/share deal values eBay at $56 billion, which is over 20 percent higher than the closing price on Friday.
Keep it locked on Shacknews for all the GameStop news as it breaks.
This article is only meant for educational purposes, and should not be taken as investment advice. Please consider your own investment time horizon, risk tolerance, and consult with a financial advisor before acting on this information.
Full Disclosure:
At the time of this article, Shacknews primary shareholder Asif A. Khan, his family members, or his company Virtue LLC had the following positions:
Long GameStop via GME shares
Shacknews staff does not use generative artificial intelligence (AI) in their content. Shacknews strictly prohibits the use of its content for AI training or to generate text, including text in the style or format used for this publication. Shacknews reserves all rights to this work.
Asif Khan is the CEO, EIC, and majority shareholder of Shacknews. He began his career in video game journalism as a freelancer in 2001 for Tendobox.com. Asif is a CPA and was formerly an investment adviser representative. After much success in his own personal investments, he retired from his day job in financial services and is currently focused on new private investments. His favorite PC game of all time is Duke Nukem 3D, and he is an unapologetic fan of most things Nintendo. Asif first frequented the Shack when it was sCary’s Shugashack to find all things Quake. When he is not immersed in investments or gaming he is a purveyor of fine electronic music. Asif also has an irrational love of Cleveland sports.
