In a recent interview with Piers Morgan, GameStop CEO Ryan Cohen made shocking revelations about eBay's management, how he plans to take over despite pushback, as well as his vision of running the company.
Cohen, who earlier founded Chewy and sold it for over $3 billion, believes that eBay has a solid business model but is 'run by losers' who pocket millions of dollars in risk-free compensation. For them, Cohen thinks it is just a paycheck and a job, and if a deal is ever reached, 'we'd be getting rid of the board.'
eBay management cited multiple reasons for rejecting GameStop's $55.5 billion acquisition bid, including doubts over Cohen's ability to manage the exorbitant financing, confidence in eBay doing well as a standalone company, as well as operations risks and the leadership structure of the combined entity that could impact eBay's long-term valuation.
However, Cohen cleared the air about how he plans to finance the eBay takeover. The company has over $9 billion in cash and equivalents on its balance sheet. Around $20 billion would come from banks, while the remaining would be issued in stocks.
'In this case, it is less about the actual financing, more about dealing with an entrenched board' that has 'zero skin in the game,' he said.
"It's run by a bunch of losers..."EXCLUSIVE: GameStop CEO Ryan Cohen hits out following his failed $56 billion takeover bid to eBay.📺https://t.co/qsJO5FBsv8@piersmorgan|@ryancohenpic.twitter.com/KcA8N8dqJI
Cohen agrees that his company's offer could be unattractive to eBay management because if the deal goes through, as 'the board that made $4 million in director fees last year is kaput. They are gone.' He even highlighted that eBay CEO hasn't invested a single dollar since assuming the post in six years.
Right now, GameStop has to deal with eBay owners rather than the management team with 'perverse financial incentives', because they are just employees seeking a paycheck, and not the owners.
'I don't like the board of directors. I have such disdain for these people that make millions of dollars in risk-free compensation, and everything is done in the name of corporate governance,' he added.
The Big Short investorMichael Burry sold his entire GameStop stake after learning that the company offered to take over eBay. Burry was worried that the merger would mean GameStop would have to compete with retail giants like Amazon. He thought that the price offered to eBay was also too high and that GameStop had better acquisition targets if they planned to buy a company anyway.
Source: International Business Times UK
