NEW YORK - GameStop CEO Ryan Cohen says he'll do "whatever we need to do" to buy eBay after the e-commerce giant rejected his $56 billion unsolicited offer as "neither credible nor attractive."
Cohen offered $125 per share in early May, half in cash from GameStop's $9.4 billion reserves, plus a $20 billion debt financing commitment from TD Securities. Analysts question whether the combined company could secure investment-grade credit ratings.
Despite the rejection, bankers and analysts say Cohen has an unlikely, but not impossible, path to seize control.
Tender Offer
Cohen could bypass eBay's board with a direct tender offer to shareholders. However, analysts say that's highly unlikely to succeed. Top institutional investors like Vanguard, BlackRock, and State Street-who together own over 22% of eBay-would need to approve. As Gordon Haskett's Don Bilson puts it, "No eBay shareholder would opt into this."
Special Meeting
Alternatively, Cohen could call a special meeting to elect new directors. But GameStop only has a 6.6% "economic exposure" to eBay, with actual voting rights on just 0.006% of shares. Analysts say that falls far short of the required 20% stake.
GameStop recently asked investors to authorize a massive share issuance-from 1 billion to 2.5 billion shares-fueling speculation Cohen plans to issue stock to buy more eBay shares.
Public Pressure
Analysts say Cohen's best bet may be public pressure. He's publicly slammed eBay as "obese" and run by "a bunch of losers." But analysts note eBay's operating profit margin is 31%-three times GameStop's.
Cohen's track record is mixed: He saved GameStop from near-bankruptcy in 2021, but his activist campaign against Bed Bath & Beyond led to the retailer's bankruptcy. Since Cohen took over in 2021, GameStop shares have fallen roughly 70%.
Wall Street awaits Cohen's next move, but as one analyst notes, "There is no rush."