A360
Key Takeaways✦ Atlas AI
01
GameStop shares fell over 10%.
02
CEO avoided financing questions.
03
Bid for eBay totals $55.5 billion.
Atlas AI
GameStop shares fell more than 10% on Monday asourceser the video game retailer disclosed an unsolicited $55.5 billion proposal to acquire eBay, prompting investor questions about how the deal would be funded.
In an interview with sources, GameStop CEO Ryan Cohen avoided repeated questions about the financing strategy, saying he did not understand the inquiries.
Offer terms and financing gap
A letter posted on GameStop’s website outlines a half-cash, half-stock offer to buy eBay for $125 per share. The company said it would use about $9.4 billion in “cash on hand” and cited $20 billion in potential debt financing from TD Securities. Adding those figures to GameStop’s market capitalization of about $11 billion totals roughly $40 billion—about $16 billion short of the $55.5 billion offer.
Relative valuations and eBay’s response
GameStop’s market valuation was about $12 billion as of Friday, compared with eBay’s valuation of roughly $46 billion.
Cohen said he had not discussed the proposal with eBay before making the offer, which eBay confirmed in a statement on Monday. eBay said its board would review the proposal before providing further comment.
