GME CEO Ryan Cohen May Reportedly Withdraw GameStop’s $56B eBay Bid — Here’s What He’s Considering Instead

According to a Bloomberg report, eBay could leverage GameStop’s roughly 1,600 U.S. retail locations to expand its presence in high-margin categories such as trading cards and collectibles under the potential alternative.

• GameStop CEO Ryan Cohen is considering proposing a partnership or joint venture that would allow eBay to tap GameStop’s retail locations, according to the report.
• The companies could use the arrangement to expand their market share in high-margin categories such as trading cards and collectibles.
• GameStop is also said to seek representation on eBay’s board as part of any partnership, but Cohen has not made a final decision yet and could weigh other options.

GameStop Corp. (GME) CEO Ryan Cohen may reportedly be reconsidering his $56 billion pursuit of eBay Inc. (EBAY) that he announced in May this year.

According to a Bloomberg report citing people familiar with the matter, eBay could leverage GameStop’s roughly 1,600 U.S. retail locations to expand its presence in high-margin categories such as trading cards and collectibles under the potential alternative.

GameStop shares were up more than 3% in Monday’s pre-market trade, while eBay shares were down more than 1%. GME and EBAY were among the top trending tickers on Stocktwits at the time of writing.

GME Could Pivot From Takeover To Partnership With EBAY

Rather than pursuing an outright acquisition, Cohen is considering proposing a partnership or joint venture that would allow eBay to tap GameStop’s retail locations, according to the report. The companies could use the arrangement to expand their market share in high-margin categories such as trading cards and collectibles.

The move would represent a change from Cohen’s earlier pursuit of an outright acquisition. In July, Cohen said he would not discuss the proposed transaction beyond what was already public, while GameStop continued to hold its large eBay position.

GameStop is also said to seek representation on eBay’s board as part of any partnership, but Cohen has not made a final decision yet and could weigh other options, according to the report.

GME’s $56B EBAY Bid

GameStop first proposed acquiring eBay in May for $125 per share, with the consideration split evenly between cash and GameStop common stock.

The non-binding proposal valued eBay’s equity at approximately $55.5 billion and represented a 46% premium to eBay’s unaffected closing price on February 4, when GameStop began accumulating its position.

Cohen said at the time that GameStop could issue additional stock to get the eBay deal done, while adding that he intends to bring his entrepreneurial mindset to turn eBay into a much larger business if the company is successful in its acquisition bid for the e-commerce giant.

He stated that he plans to leverage GameStop’s infrastructure and focus on collectibles to turn eBay into a much larger business.

eBay subsequently rejected GameStop’s acquisition proposal, calling it “neither credible nor attractive.” The company said it considered its standalone prospects, the proposed financing structure, and the operational and financial risks of a combined company before arriving at the decision.

GME stock is down 5% year-to-date, while EBAY stock is up 29%. The Invesco QQQ Trust (QQQ) is up 27% over the past 12 months, while the Vanguard Total Stock Market Index Fund ETF (VTI) is up 23%.

The Vanguard Small-Cap Index Fund ETF (VB) is up 27% during this period.

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