GameStop (GME) has made a non-binding takeover proposal for eBay, the gaming retailer’s CEO Ryan Cohen said over the weekend. GameStop is reportedly offering $125 per share, with Cohen telling CNBC, “We are offering half cash, half stock, and we have the ability to issue stock in order to get the deal done.” GME stock opened Monday’s trading session falling over 6%, while Ebay (EBAY) shares moved over 6% higher, a complete inverse effect.
The offer, split evenly between cash and GameStop common stock, represents a 20% premium to eBay’s Friday close of $104.07, and a 46% premium to its closing price on Feb.4 — when the gaming retail giant started building a stake in the company, GameStop said in its statement. Shares of eBay climbed roughly 6% after the market opened Monday to just over $110, well below GameStop’s $125 offer, suggesting investors are skeptical the deal will close. GameStop’s current market value is just below $12 billion, while eBay’s is $46 billion.
“We are just starting,” Cohen said on CNBC’s “Squawk Box.” “For obvious reasons, eBay is a public company, and there are all kinds of perverse financial incentives from the board to the management team. So there’s only one way to approach something like this,” eBay confirmed that it received the offer in a statement on Monday, and said its board would review it.
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Recently, GameStop (GME) stock has seen instability in value, as the company looks to cut losses and keep revenue going. The rise of digital purchases in gaming has made the value of GameStop questionable. As a result, GameStop has pivoted toward e-commerce and crypto in recent years, launching an NFT wallet and taking a stake in bitcoin. The stock has seen renewed periods of meme stock frenzy since it became the poster child of retail investors more than five years ago. Year to date, GameStop stock is up 32%, but its performance over the past five years has dipped more than 30%.
Source: Watcher Guru
