GameStop CEO Ryan Cohen is reportedly reconsidering his $56 billion acquisition attempt of eBay, with a new report from Bloomberg suggesting a pivot towards a strategic partnership. This shift comes after eBay firmly rejected the unsolicited offer, deeming it "neither credible nor attractive."
The proposed collaboration would focus on leveraging GameStop's physical retail presence and Cohen's vision for a digital marketplace. Specifically, the companies would aim to increase the sale of collectible items, such as trading cards, through eBay, while also exploring the potential for a marketplace dedicated to in-game digital items. Cohen highlighted the significant market for video game in-game items, suggesting eBay's platform would be an ideal venue for their sale.
GameStop currently holds a 9.8% stake in eBay. The initial acquisition proposal involved purchasing shares at $125 each, with half paid in cash and the other half in GameStop stock. Financing for the substantial acquisition, which would have valued eBay at nearly $54 billion against GameStop's approximately $12 billion market cap, was a point of contention. Cohen had previously indicated plans to secure $20 billion in debt financing from TD Bank and utilize GameStop's $9 billion in cash, with additional funding potentially sourced from Middle Eastern sovereign wealth funds.
Cohen's broader strategy for GameStop has included cost-cutting measures and expanding into live commerce. He has expressed a belief in identifying and revitalizing underperforming assets, stating earlier in the year that his approach would be either "genius or totally, totally foolish." While GameStop has declined to comment on its future plans, this potential partnership represents one of several strategic avenues being considered by the company.