- GameStop has made a non-binding takeover proposal for eBay with an offer of $125 per share, split evenly between cash and stock.
- The proposal represents a 20% premium to eBay’s Friday close and a 46% premium to its price when GameStop began building its stake in February.
- Shares of eBay climbed roughly 6% Monday, while GameStop stock fell over 6%, reflecting market skepticism about the deal’s completion.
- GameStop, valued at just below $12 billion, is attempting to acquire eBay, which has a market value of $46 billion.
GameStop CEO Ryan Cohen announced over the weekend that the gaming retailer has made a non-binding takeover proposal for eBay, reportedly offering $125 per share. Cohen told CNBC, “We are offering half cash, half stock, and we have the ability to issue stock in order to get the deal done.”
The stock market reacted inversely Monday, with GameStop shares falling over 6% and eBay shares moving over 6% higher. Consequently, eBay’s price climbed to just over $110, well below the $125 offer, suggesting investor doubt. Meanwhile, GameStop stated the offer represents a 20% premium to eBay’s Friday close and a 46% premium to its price on Feb. 4.
“We are just starting,” Cohen said on CNBC’s “Squawk Box.” He suggested there are perverse financial incentives from eBay’s board to management. However, eBay confirmed receiving the offer and said its board would review it.
Recently, GameStop stock has seen instability as the company pivots toward e-commerce and crypto to cut losses. The rise of digital purchases has made its value questionable, leading to launches of an NFT wallet and a stake in Bitcoin. Consequently, the stock has seen renewed meme frenzy since becoming the poster child of retail investors over five years ago.
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