GameStop offers $56 billion for eBay, struggles to explain how it'll pay for it
Summary
GameStop has made an unsolicited offer to buy eBay for $55.5 billion, proposing to combine eBay’s online marketplace with GameStop’s physical stores to improve services and reduce costs. GameStop plans to pay partly in cash and partly with its own stock but faces doubts about how it will fund the deal since eBay is much larger.Key Facts
- GameStop offered $55.5 billion to buy eBay in a deal combining online and physical retail.
- GameStop believes eBay spends too much on sales and marketing and could grow by using GameStop’s store network.
- GameStop wants its stores to verify items for sale on eBay and serve as places for shipping and livestream sales.
- eBay’s market value is more than four times larger than GameStop’s.
- GameStop plans to pay half the offer in cash and half in its own stock.
- GameStop claims to have $9.4 billion in cash and investments and a potential loan for $20 billion, but there is a $16 billion funding gap.
- GameStop CEO Ryan Cohen said he will become CEO of the merged company and will be paid only based on company performance.
- Industry experts and CNBC hosts expressed skepticism about GameStop’s ability to finance the deal and grow its business.
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