GameStop might issue additional stock to complete its $55 billion takeover of eBay amid skepticism from economists about whether the video game retailer could afford to acquire the company, whose market value is more than double GameStop's.
Analysts questioned whether GameStop could afford the acquisition.
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GameStop CEO Ryan Cohen told CNBC on Monday the video game retailer’s half-cash, half-stock bid for eBay may rely on issuing stock, or the process in which a company creates and gives new shares of itself to complete a deal instead of paying cash.
GameStop has yet to discuss the bid with eBay’s management after publicly announcing its offer on Sunday, Cohen said.
Issuing stock may dispel concerns from economists about GameStop’s ability to fund the offer, after Bernstein analysts wrote in a note that the retailer faced financing challenges, including GameStop’s smaller balance sheet and the debt and equity required to buy eBay, adding they would be “more surprised if anything became of it.”
Morgan Stanley analysts, in a note last week before GameStop’s offer was made public, said the broader market would be “skeptical of a potential deal’s feasibility.”
“Big Short” investor Michael Burry, who has lauded GameStop’s financial turnaround with Cohen as CEO, wrote on his Substack he was concerned about how GameStop would be able to acquire eBay, whose $55 billion valuation under GameStop’s offer far exceeds the video game retailer’s $11.4 billion market cap as of Monday.
Shares of eBay soared by 5.7% in early trading on Monday, pacing the stock’s largest intraday gain since a 9.8% surge in January 2025.
EBay on Monday said it received an acquisition proposal from GameStop, noting it had no prior talks with the retailer before the bid was submitted. EBay said its board would review the offer before making any recommendations to shareholders or commenting on a possible deal.
55.6%. That’s how much eBay shares have risen over the last year, adding nearly $20 billion to the e-commerce firm’s market valuation. EBay’s stock has soared by more than 25% this year, with a rally sparked in February after the company reached a $1.2 billion deal for secondhand clothing reseller Depop from Etsy.
GameStop said it would pay $125 a share to acquire eBay in a deal valuing the e-commerce firm at roughly $55.5 billion. Cohen, the Chewy cofounder who joined GameStop’s board in 2021 before becoming CEO in 2023, told the Wall Street Journal he was prepared for a hostile takeover if eBay’s board was unreceptive to its offer. Cohen, who said TD Bank would provide up to $20 billion in debt financing to complete the deal, pitched eBay as a possible competitor to Amazon, telling the Journal he was “thinking about turning eBay into something worth hundreds of billions of dollars.” GameStop’s 1,600 retail locations would provide eBay with a “national network for authentication, intake, fulfillment and live commerce,” the retailer said, adding it would cut $2 billion in annual costs within a year.
EBay Soars As Ryan Cohen Says GameStop Could Issue Stock To Pay For Takeover Of Much Bigger Retailer (CNBC)
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