GameStop CEO Ryan Cohen’s quixotic campaign to take over eBay has ratcheted up a notch. The meme stock gaming retailer now owns 9.8 percent of eBay, according to its latest regulatory filings. That’s roughly equal to about $5 billion in current eBay stock, or half of GameStop’s total market cap. “I’m not going to call my shots, but we’re coming for eBay one way or another,” Cohen said on Bloomberg this week, a transcript of which he included in his regulatory filings on Friday.
Cohen’s pitch for the merger is that he will cut costs and lay off tons of people to make eBay way more profitable, as he did with GameStop, and that the two companies’ combined operations would make it a competitor to Amazon in the reseller market for physical goods space. Oh, and Cohen would become CEO of the new eBay GameStop entity. A representative for eBay previously called the deal “neither credible nor attractive.”
The GameStop CEO is now continuing to use the ailing brick-and-mortar chain to buy up equity in eBay and giving interviews to incredulous business reporters who still can’t figure out how the math maths. Here’s what Cohen said when grilled by Bloomberg‘s Ed Ludlow this week:
What is my goal? I own a lot of stock and I don’t have any perverse incentive. So it’s to make the business a lot more profitable and to maximize shareholder value. So that’s the plan. It’s not that complicated. And I’ve spoken about huge growth areas within cutting costs. That’s just short term. But live commerce and building out an in-game visual marketplace. So I share that with you. But everyone in the past I’ve said, well, what’s the business plan? What’s the business plan?
But they only do that with GameStop for whatever reason. Well, you know what the business plan is to make money. GameStop just reported its highest earnings in the company’s history with a fraction of the stores. And everybody in the media said GameStop was going to fail. So the plan is to make more money. The plan is to maximize shareholder value. Am I going to go and share my proprietary plan and every single detail and give it out to my competitors? That that’d be a pretty stupid thing to do.
That might be the “concept of a plan” for running eBay, but it doesn’t explain how Cohen plans to successfully complete his hostile takeover of the company. GameStop’s meme stock aura coming out of the pandemic has allowed it to raise tons of cash by selling more shares. In theory, Cohen intends to keep Reddit upvoting his way into a serious bidding position. Once any sort of deal becomes seemingly viable, if that’s even possible, Wall Street investors who want to hedge their bets may pony up some financing to get a cut of the action.
I am not a finance expert. None of this is investing advice. What I do know is that Cohen’s eBay ambitions will continue torching anything left of GameStop’s identity in the process. Clearly bored with running what have become Pokémon card pawnshops, Cohen is ready to move on to his next mark. You can tell by the way he lost it over being asked about Sony killing PlayStation game discs in the next console generation.
“It doesn’t matter,” Cohen said impatiently. “It doesn’t matter at all. Software. It mattered in the past. Software today makes up less than 12 percent of the business, and collectibles makes up over half the business. So it’s totally and totally irrelevant.”