GameStop CEO Ryan Cohen is considering yanking his $56 billion bid to take over eBay after the bid received a lukewarm reception on Wall Street, according to a report.
Cohen – who became a favorite of retail investors as GameStop rose to “meme stock” prominence – is instead weighing whether to propose a partnership that would allow eBay access to GameStop’s base of about 1,600 US stores, Bloomberg reported, citing people familiar with the matter.
The partnership would theoretically allow both GameStop and eBay to take a larger slice of the lucrative markets for trading cards and collectibles, sources told the outlet. GameStop would also want a seat on eBay’s board of directors.
EBay’s stock closed down about 4% to $107.71 on Monday. GameStop’s stock dropped 2% to $18.79 per share.
Cohen generated healthy skepticism in May when he unveiled a non-binding proposal to buy eBay at $125 per share in cash and stock – an amount that, at the time was a 20% premium over eBay’s stock price.
The billionaire GameStop CEO told the Wall Street Journal that he had a plan that would turn eBay into “something worth hundreds of billions of dollars.”
Critics questioned where GameStop, whose roughly $8.6 million market cap is far smaller than eBay’s valuation of $48 billion, would come up with the money for the deal. At the same time, GameStop has built a 9.75% ownership stake in eBay, making it the company’s second-largest shareholder, according to Bloomberg.
EBay’s board of directors said it was against Cohen’s takeover offer in May, describing it as “neither credible nor attractive” and raising doubts about his ability to secure financing.
“eBay’s Board is confident the company, under its current management team, is well-positioned to continue to drive sustainable growth,” Chairman Paul Pressler said in a statement on May 12.
The Post has reached out to GameStop and eBay for comment.