GameStop shares fall 10% after CEO skirts questions over eBay acquisition details | eBay
Shares of GameStop fell more than 10% on Monday as questions emerged about how the company would finance its surprise $55.5 billion bid for eBay.
One Interview with CNBCGameStop CEO Ryan Cohen said he did not understand the questions and did not answer repeated questions about how the video games retailer could afford the deal.
A letter posted on GameStop’s website outlines a half-cash, half-stock offer to acquire eBay for $125 per share; Approximately $9.4 billion of this offering is being made using “cash on hand” and $20 billion in potential debt financing from TD Securities. When we add this to GameStop’s market cap of approximately $11 billion, the total figure rises to approximately $40 billion; This leaves it $16 billion below the amount he offered in his unsolicited bid.
“Where does the rest of the money come from?” asked CNBC journalist Becky Quick, both following questions from Andrew Ross Sorkin, co-host of the network’s morning talkshow, Squawk Box.
“I don’t understand your question,” Cohen replied. “We are offering half cash, half stock and have the ability to issue stock to complete the deal. However, full details of the offer are on our website.” GameStop did not respond to a request for comment.
The video game retailer’s most recent market valuation was about $12 billion as of Friday; this was a tiny fraction of eBay’s $46 billion valuation. The gaming company rose to viral fame online during the meme stock craze of 2021; This frenzy made Cohen a puppet of the movement, dubbing him the “meme king” by his online followers.
Cohen said in a statement Monday that he had not had any discussions with eBay about the offer. The company declined to comment further until its board has fully considered the offer.
