GameStop CEO Ryan Cohen is trying to acquire auction site eBay for more than $50 billion, and now the billionaire has listed several GameStop-related items on the platform to help, he says, pay for the buyout.
Cohen is known for trolling and shenanigans, and this is just the latest example. Cohen is seemingly poking fun at the people saying he cannot possibly fund the massively leveraged deal proposal.
“I’m selling stuff on eBay to pay for eBay,” Cohen wrote.
Cohen’s eBay page includes 25 items and each of them includes hand-signed copy of the letter he wrote to eBay’s management proposing his deal and talking about how he will massively cut costs to help make eBay a “legit competitor to Amazon.” These items include GameStop store signs (current highest bid is $10,800), a Halo 3 flag ($910 high bid currently), and a carpet from a GameStop store ($750 right now).
You can visit Cohen’s page on eBay to see all of his listings.
How we got here
Cohen’s unsolicited bid for eBay was officially announced on May 3, though he said in January this year that he was planning to buy a company to help transform GameStop’s business. “It’s ultimately either going to be genius or totally, totally foolish,” he said at the time of his plan.
Now that his plan has been revealed, some key players in the market believe it is indeed foolish. Celebrity investor Michael Burry, a longtime GameStop investor known for profiting from the sub-prime mortgage crisis, recently said he dumped all of his shares after learning that Cohen’s deal for eBay would include lots of debt.
GameStop’s shares jumped on the evening of Friday, May 1 after The Wall Street Journal reported that Cohen was looking to buy eBay. GameStop confirmed the deal proposal–including the big debt–on Sunday, May 3. When the stock market opened on Monday, May 4, GameStop shares dropped. However, the company’s stock value remains ahead of where it was on Friday before the buyout reports emerged.
eBay shares followed a similar pattern, and are also up over the past week followed periods of volatility, sitting at around $107 today. The company’s president and CEO Jamie Iannone recently sold millions of dollars worth of company stock.
GameStop started acquiring shares of eBay in February this year and currently owns about 5% of eBay. Cohen’s proposal is to buy 100% of eBay at $125 per share in cash and stock.
GameStop, as a company, has a market cap of around $12 billion, compared to eBay’s $46 billion. Cohen said he has $20 billion in debt financing from TD Bank to help get the deal done for eBay. GameStop also has about $9 billion in cash on hand. To make up the difference, GameStop could look for outside funding, including from Middle East sovereign wealth funds, reports have said.
In an interview with CNBC–which featured bizarre moments–Cohen said GameStop could issue more stock to help pay for the proposed buyout of eBay. Cohen later appeared on TBPN and had a much more measured conversation about his proposal to buy eBay, which would include major cost-cutting.
Cohen would become the CEO of the combined company of GameStop and eBay, if the deal comes together. He also said he could pursue a proxy bid for eBay if eBay’s management is not receptive. This would involve Cohen taking his deal directly to shareholders to force the issue.
Cohen would personally stand to benefit in a major way if he can succeed in transforming GameStop’s business into a $100 billion behemoth. Earlier this year, GameStop announced a new compensation package for Cohen that would pay him as much as $35 billion if he can reach certain extremely lofty market value and profitability targets, including reaching a valuation of $100 billion.
People have questioned if Cohen will be able to deliver on his promises to help accelerate eBay’s business if his deal materializes. He does have a history of success in turning businesses around, however, at least from a numbers perspective. Cohen started at GameStop in January 2021, taking the company from an annual $381 million net loss in fiscal 2021 to an annual profit of $418.4 million for the latest fiscal year.
Cohen’s role as GameStop CEO has been controversial, as the billionaire Chewy founder has overseen a dramatic downsizing of the company’s business with layoffs, store closures, and selling off (after previously closing) the iconic gaming magazine Game Informer.
This is just the latest GameStop drama, as many will recall the short squeeze situation in 2021 that sent GameStop’s shares to the moon, minting many millionaires along the way. The events were dramatized in the 2023 movie Dumb Money.
