GameStop CEO Ryan Cohen might be ready to pull the plug on his ambitious plan to purchase eBay for $56 billion, a new report claims. Cohen–who came up with the plan while seated on his porcelain throne–had been pursuing the deal ever since it was announced, but eBay rejected the offer, saying it was “neither credible nor attractive.”
According to Bloomberg, Cohen is now considering a different strategy that would revolve around a partnership between eBay and GameStop to sell more collectible items like trading cards. GameStop has roughly 1,600 physical stores across the US, and Cohen has also spoken about creating a marketplace for digital gaming items through eBay. While eBay specializes in selling physical items like art and trading cards, Cohen added that video game in-game items were “massive,” and eBay would be the perfect platform to sell them.
This is just one of several options available to GameStop, according to people familiar with the matter, but it has declined to comment about its future plans. While GameStop hasn’t succeeded yet in acquiring eBay, it does have a 9.8% stake in the ecommerce platform. The original offer made to eBay’s shareholders was to purchase each share for $125–50% in cash and 50% in GameStop stock–but where GameStop would get the money to finance this remains a mystery.
GameStop has a market cap of around $12 billion, while eBay is currently valued at almost $54 billion. Cohen said that he could secure $20 billion in debt financing from TD Bank, while GameStop had $9 billion in cash that could be used toward the acquisition. The rest of the cash would come from outside sources, with Middle East sovereign wealth funds reportedly being one of the sources. Cohen originally stood to receive a pay package worth approximately $35 billion if the deal went through, but he canceled this plan.
“It’s ultimately either going to be genius or totally, totally foolish,” Cohen said earlier this year. “There are a lot of diamonds in the rough … that have sleepy management teams. I didn’t fix GameStop to stop there.”
If he succeeded in purchasing eBay, Cohen said in previous comments that he’d follow his GameStop business playbook by cutting costs and expanding into live commerce further. This is something that eBay does offer through eBay Live, livestreams hosted on the site where sellers promote their products to potential consumers–similar to an old-school after-hours live infomercial.
