GameStop shares fall 10% after CEO skirts questions over eBay acquisition details

GameStop shares dropped over 10% on Monday following CEO Ryan Cohen's evasive responses regarding the financing of the company's $55.5 billion unsolicited bid for eBay. In a CNBC interview, Cohen deflected questions about how GameStop, valued at approximately $12 billion, would fund the acquisition, which proposes a half-cash, half-stock offer. While GameStop's website outlines a plan using existing cash and potential debt financing, this still leaves a significant funding gap. eBay confirmed it had not discussed the proposal with GameStop and is reviewing the offer. The market reacted negatively to the lack of clarity on the deal's financial feasibility.

GameStop has made an unsolicited $56 billion offer to acquire e-commerce giant eBay, according to a confirmation from eBay on Monday. The video game retailer, valued at approximately $12 billion, proposes a deal comprising half cash and half stock, with plans to secure $20 billion in debt financing. GameStop CEO Ryan Cohen believes he can improve eBay's profitability by implementing cost-cutting measures and leveraging GameStop's physical store network to compete with Amazon. GameStop has already acquired a 5% stake in eBay and claims it can achieve $2 billion in annual cost savings within a year of the transaction. eBay stated there were no prior discussions with GameStop before receiving the offer.

GameStop has submitted a surprise $55.5 billion cash and stock offer to acquire e-commerce platform eBay. The bid values eBay at $125 per share, a premium to its recent trading price. GameStop CEO Ryan Cohen believes he can significantly improve eBay's performance and potentially challenge Amazon. He has indicated a willingness to approach eBay shareholders directly if the board rejects the offer. While eBay will review the proposal, analysts are skeptical due to the companies' differing business models and GameStop's smaller financial standing. GameStop, known for its "meme stock" surge during the pandemic, is undergoing a turnaround under Cohen's leadership.