GameStop Shares Fluctuate Following Cohen's eBay Acquisition Proposal
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Cohen had proposed that GameStop buy eBay, a much larger company, for $56 billion through an even mix of cash and stock. GameStop’s ability to finance the deal, however, has been a subject of debate on Wall Street.
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New York Post BusinessRyan Cohen’s GameStop disclosed earlier this month that it was pursuing a takeover of eBay, seeing it as a vehicle to compete with online retail giant Amazon. AFP via Getty Images
FortuneRyan Cohen’s GameStop disclosed earlier this month that it was pursuing a takeover of eBay, seeing it as a vehicle to compete with online retail giant Amazon.
CNBCGameStop CEO Ryan Cohen last week unveiled an audacious bid for eBay, offering to acquire the online marketplace for $125 per share in a cash-and-stock deal. EBay is much larger than the video game retailer, with a market cap of just over $48 billion, while GameStop's is roughly $10.3 billion.
ZeroHedgeRecall that Cohen's $56 billion bid for eBay was, in his own words, funded by "half cash and half stock." Yet, when Cohen joined CNBC's Andrew Sorkin for an interview early last week, he struggled to explain the deal math, given that GameStop's market capitalization is only a fraction of eBay's.
Financial TimesRyan Cohen, GameStop’s rebel CEO His $56bn hostile bid for eBay has baffled Wall Street, but it could be the world’s first meme stock-driven deal
BloombergOn paper, GameStop Corp.’s head-turning $56 billion bid for eBay Inc. offers a potential fat profit for investors willing to wager on the unconventional deal. In practice, merger specialists aren’t buying it.
BBC BusinessBut analyst Sucharita Kodali, a retail analyst at research firm Forrester, told the BBC at the time that the proposal did not sound like a "terribly good offer" as it would saddle eBay with GameStop's debt. The BBC has approached GameStop for comment.
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GameStop Corp. shares spiked and then quickly dropped in postmarket trading Monday after cryptic social media posts showed up and then disappeared from the social media account of Keith Gill, the financial influencer known as “Roaring Kitty,” who became prominent during the 2021 meme-stock craze.
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BBC BusinessGameStop rose to prominence as a "meme stock", which sees retail investors buy up shares in unloved companies that professional investors have bet against, causing the share price to rise and fall sharply.
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"We are offering half cash, half stock, and we have the ability to issue stock in order to get the deal done," Cohen said. "But the full details of the offer are on our website. We'll see what happens."
6 details only one outlet reported
Independent claims that didn't surface elsewhere in our corpus. Treat as supplementary — not corroborated across outlets.
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01 New York Post Business The company previously said that it started accumulating shares in eBay beginning in February and currently has a 5% stake.
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02 BBC Business It also cited "GameStop's governance" in the list of factors it had determined before rejecting last week's bid.
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03 Fortune By the start of 2000, I was already a veteran writer for Fortune warning our readers that the dot.com craze had lifted Nasdaq valuations to unsustainable highs. All of the time-honored metrics pointed to the same outcome—crash ahead! Then, AOL and Time Warner, Fortune‘s parent as owner of magazine-maker Time Inc., issued a shocker for the ages that, as it turned out, confirmed my worst fears: The tiny internet hotshot, its brand barely a decade old, was purchasing the fabled media colossus multiple times its size. For the announcement at Time Warner’s Manhattan headquarters, the media empire’s CEO Jerry Levin, appearing sans tie or jacket, took the stage alongside AOL chief Steve Case, and avowed his delight at taking Case’s offer since “I accept dot.com valuations.”
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04 Bloomberg The gambit, conceived by the gaming retailer’s billionaire chief executive Ryan Cohen and unveiled on Monday, involves an unsolicited bid for a target four times the size of his own company at $125 per share in cash and stock. That represented a 20% premium to Friday’s close. Instead of piling into the shares to lock in the differential, though, investors have largely stayed away.
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05 CNBC Moody's Ratings said Wednesday the proposed acquisition would be "credit negative" for eBay because of the substantial increase in leverage implied by the deal structure.
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06 ZeroHedge Certainly, Cohen is attention-seeking... Was the stunt all about trying to cash in on eBay call options?
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