Ryan Cohen, CEO of the American video game store chain GameStop, has made an unexpected offer to acquire eBay for about $56 billion. He plans to transform the oldest online auction into a "serious competitor to Amazon."
Ryan Cohen, CEO of the American video game store chain GameStop, has made an unexpected offer to acquire eBay for about $56 billion. He plans to transform the oldest online auction into a "serious competitor to Amazon."
GameStop already owns about 5% of eBay, according to The Wall Street Journal. Cohen is offering to buy the remaining assets for $125 per share (50% cash and 50% GameStop stock), a 20% premium to the market value as of last Friday.
"eBay should be worth — and will be worth — a lot more money. I'm thinking about turning eBay into something worth hundreds of billions of dollars," Cohen said in an interview with the publication.
Despite the ambitious plan, the deal looks financially difficult: GameStop's market capitalization is about $12 billion, which is almost four times less than eBay's value ($46 billion at the time of the offer's announcement). Cohen plans to use $9 billion of GameStop's own funds to finance the acquisition, as well as $20 billion in debt financing from TD Bank. The rest of the funds may come from external investors, including sovereign wealth funds in the Middle East.
Cohen's strategy involves integrating GameStop's physical stores with eBay's online platform. In particular, retail outlets can become points of inspection and delivery of goods. It is also planned to focus on live commerce (sales through live broadcasts) and niche categories, such as trading cards and retro games. Cohen has already stated that in case of success he will lead the combined company without a fixed salary, counting only on bonuses from capitalization growth.
Wall Street analysts are skeptical. Bernstein experts note that eBay has already demonstrated a successful transformation with AI and a focus on collectibles, so radical changes can be risky. If eBay management rejects the offer, Cohen is ready to start a fight for shareholder votes.
Ryan Cohen took over GameStop in 2023 after the company became the center of the “meme stock boom” in 2021. Under his leadership, the retailer closed loss-making stores and exited most international markets, including the Russian Federation, focusing on high-margin products for gamers and collectors.
