Perhaps in an attempt to expand its Pokémon trading empire, video game retailer GameStop is trying to acquire e-commerce platform eBay. From surviving COVID-19 with a stockpile of memes to funding the Charizard Ultra Premium Collection and a potential eBay acquisition, GameStop is making good progress.
On Sunday, May 3, GameStop made an offer to buy eBay for $125.00 per share, which amounts to about $55.5 billion. Since eBay’s stock price closed at $104 on Friday, May 1, GameStop is offering a 20% premium per share. The huge sum will be paid 50% in cash and 50% in stock, GameStop CEO Ryan Cohen explained in an open letter to eBay’s board of directors.
GameStop already owns a 5% stake in eBay, Cohen said. He also mentions that GameStop’s net loss has gone from $381 million to $418 million in net profit since 2021, and that if the offer is accepted, “approximately 1,600 GameStop stores in the U.S. will provide eBay with a national network of authentication, acceptance, fulfillment, and direct sales.” Cohen is offering himself as CEO of the combined corporations.
In an interview with The Wall Street Journal, Cohen says he wants to turn eBay into a “credible competitor to Amazon.” If eBay’s board of directors doesn’t approve his plans, he won’t hesitate to challenge the proxy. At the time of writing, eBay has not made any public statements about the proposal.
The unbinding and unsolicited GameStop offer may come as a bit of a surprise, given that eBay has a market value of $46 billion, while GameStop has a market value of about $12 billion. But the offer is even more surprising given GameStop’s financial woes, which culminated in the 2021 meme stock craze, when Reddit users decided to buy GameStop shares in an attempt to save the video game retailer from bankruptcy.
So GameStop might not seem like the most reliable eBay buyer, but Cohen has earned his reputation for overbought and unpredictable market fluctuations, so let’s not dismiss this offer just yet.
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