eBay's board has officially told GameStop to take its $55.5bn (£41bn) takeover bid and go home, deeming the proposal 'neither credible nor attractive' - which is corporate-speak for 'are you serious?'
Earlier this month, the video game retailer - best known for turning your uncle's stock portfolio into a rollercoaster during the 2021 meme stock frenzy - made an unsolicited half-cash, half-stock offer for the online marketplace. The only problem? GameStop was worth roughly $12bn before the bid, which is about a quarter of eBay's $46bn valuation. That's like a goldfish trying to swallow a shark.
GameStop's shares have since dropped over 12%, especially after CEO Ryan Cohen appeared on CNBC and, when asked how the company would afford the deal, responded with the financial equivalent of 'I don't understand the question.' In a letter published Tuesday, eBay chair Paul Pressler cited 'uncertainty around GameStop's financing proposal' and 'operational risks' - because nothing says 'attractive deal' like a buyer who can't explain how they'll pay for it.
Cohen has threatened a hostile bid, but the math doesn't add up: GameStop has a 5% stake in eBay and offered $125 per share using $9.4bn in cash and $20bn in debt financing from TD Securities. Even adding GameStop's own $10bn market cap, that's still $16bn short. Cohen, who joined GameStop in 2020, has vowed to turn eBay into a 'legit competitor to Amazon' through cost-cutting - because that's never gone wrong.
Meanwhile, eBay is busy acquiring British resale app Depop for $1.2bn to woo younger shoppers, presumably ones who didn't lose their life savings on meme stocks.