GameStop CEO Ryan Cohen has intensified his pursuit of eBay, declaring he will "continue doing whatever I need" to acquire the online marketplace. The unsolicited $55.5 billion bid, which values eBay at $125 per share split between cash and GameStop stock, has yet to receive a formal response from eBay's board.
eBay's board is currently reviewing the proposal with its advisers. The company has urged shareholders to remain patient while it assesses the value of the stock component and whether GameStop can deliver a binding, actionable offer. Cohen has threatened to take the bid directly to eBay shareholders if the board continues to resist.
The offer price of $125 per share represents a significant premium over eBay's current trading price. Shares of eBay last traded at $107.69, well below the offer, while GameStop stock closed at $24.28. The discount suggests investors remain skeptical that the deal will be completed, with most merger arbitrage traders staying on the sidelines.
Cohen envisions leveraging GameStop's physical store network to enhance eBay's capabilities, including authentication, shipping, and live commerce. He has pitched the deal as a way for eBay to better compete with Amazon.com. In a bid to generate attention, Cohen has even listed personal items for sale on eBay.
eBay's first-quarter results were strong, with revenue climbing 19% to $3.1 billion and gross merchandise volume reaching $22.2 billion, up 18%. CEO Jamie Iannone described the performance as a "strong start to the year" and highlighted eBay's growing status as a marketplace for enthusiasts.
GameStop holds a 5% economic stake in eBay and has lined up financing from TD Securities, including up to $20 billion, with plans to use $9.4 billion in cash and liquid assets for the cash portion of the bid. However, GameStop's filing acknowledged significant risks, including potential financing issues, antitrust hurdles, shareholder votes, and the lack of access to eBay's books.
eBay has been actively reshaping its portfolio, including a $1.2 billion cash acquisition of Depop from Etsy in February. The deal brings a resale platform popular with younger consumers, allowing eBay to double down on direct consumer-to-consumer transactions.
Corporate governance experts have noted the unusual nature of Cohen's public campaign. Jill Fisch of the University of Pennsylvania called it a strategy to "generate coverage," while Ann Lipton of the University of Colorado described the move as "very hard to parse."
eBay's board faces several options: open negotiations, reject the bid, push for improved terms, or wait for Cohen to take his case to shareholders. For now, the company remains in a review phase, with no immediate actions planned.
