legal

GameStop CEO's eBay account reinstated following takeover PR stunt

Ryan Cohen briefly banned after bootstrapping cash ostensibly to buy the auction site

GameStop CEO Ryan Cohen has had his eBay account reinstated after the platform suspended him for selling personal items to help fund his takeover bid for the digital auction house.

Less than 12 hours after Cohen announced he was selling various memorabilia and vintage wares to fund the proposed $55.5 billion buyout offer made earlier in the week, he shared a screenshot of an email informing him that his PR stunt had landed him a platform ban.

"We wanted to let you know that your eBay account has been permanently suspended because of activity that we believe was putting the eBay community at risk," the email read. 

"We understand that this must be frustrating, but this decision was not made lightly and it's important that we keep our marketplace safe for everyone. For more information, see our article on how and why accounts can be suspended or review our User Agreement."

The Register asked eBay why it suspended and reinstated Cohen's account, but the company did not immediately respond.

Supporters of GameStop's bid for the auction site can show it via Cohen's page, where they can pick up rare games, tech, and other valuables.

Highlights among the 36 listings include genuine GameStop storefront signs, which are currently going for just under $15,000 with bidding still open, and a Halo 2 Master Chief statue going for a similar amount.

Cohen's original Apple iPhone is also up for grabs, with bidding now topping $9,100, and he has some baseball trading cards going for several thousand dollars too.

He said that the winning bidder on each item will receive a hand-signed "Letter to eBay" as thanks for their support.

GameStop's bid

GameStop announced its offer to buy eBay on May 3 at $125 per share - a 46 percent increase on its February 4 closing price - which is the date GameStop first started buying eBay shares, taking its ownership stake to 5 percent.

Cohen said if the bid is successful, GameStop and eBay will operate as a combined company, and the CEO, who took over the gaming retail business in 2021, would pursue $2 billion in cost reductions in the first year.

This would include slashing eBay's current $2.4 billion marketing budget in half, as well as reductions across product development and general administration.

While eBay share price rallied following the announcement, GameStop stock fell by around 10 percent following an interview Cohen gave to CNBC.

In it, he shied away from calling the buyout proposal "hostile," instead opting to call it "unsolicited," and failed to robustly answer questions about the structure of the deal.

Asked about the value in the context of GameStop's $12 billion market cap, Cohen repeated the information previously stated in the initial announcement: the purchase will comprise half cash and half GameStop stock, and it had secured a $20 billion financing letter from TD Bank. He declined to elaborate further.

Already widely reported, investor Michael Burry of The Big Short fame dumped his GameStop shares after the company outlined its proposed deal structure, telling his Substack subscribers that it was over-leveraged.

eBay acknowledged GameStop's bid on Monday, and said it would discuss it at board level. "Until the Board has further carefully and thoroughly considered the proposal, the company does not intend to comment further at this time." ®