For 56 billion US dollars: GameStop wants to take over eBay
The much smaller video game retailer wants to take over eBay, if necessary even against the will of the management. For now, they have received an offer.
(Image: Brandi Lyon Photography / Shutterstock.com)
US video game retailer GameStop wants to buy eBay and has submitted an offer to the significantly larger online marketplace worth a total of 56 billion US dollars. Should the management not accept the offer, they will approach the shareholders directly, GameStop CEO Ryan Cohen announced on Sunday. The takeover plans had become public beforehand. According to GameStop, cash reserves of 9.4 billion US dollars and a financing commitment of 20 billion US dollars from the bank TD Securities are available for the takeover. Where the remaining 26.1 billion US dollars are to come from is unclear. Cohen allegedly wants to make eBay a serious competitor to Amazon.
eBay remains silent
The Wall Street Journal had made the unusual takeover plan public in advance over the weekend. The US newspaper now points out that eBay was previously valued at around 46 billion US dollars and GameStop at only 12 billion. According to the report, eBay's share price rose by about 12 percent. As part of the takeover offer, GameStop also announced that it already holds five percent of eBay's shares. The video game retailer also promises to reduce eBay's annual costs by a total of two billion US dollars within 12 months of a takeover. The money is to be saved mainly in marketing for the marketplace “with near-universal brand recognition”.
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Cohen took over as CEO of GameStop in 2023, having previously criticized the video game retailer's management as too slow and continuously increased his stake. GameStop made headlines in early 2021 when its share price, driven by private investors organized online, experienced a breathtaking rally. This caused enormous losses for hedge funds that had bet on a price drop. Under Cohen's leadership, GameStop has closed all its stores in Germany, among other things, and has primarily focused on the business with collectible cards and retro console games. In the event of an eBay takeover, Cohen is to be remunerated “solely based on the performance of the combined company.”
There was initially no reaction from eBay to the unusual takeover plan. The company has been trying for some time to focus more on lucrative categories such as collectibles, car parts, and used fashion items. The marketplace is also increasingly relying on AI technology to facilitate shopping on the platform. Just a few days ago, the company announced an increase in revenue and profit in the latest quarter that is attributed to all major product categories. CEO Jamie Iannone spoke of a strong start to the year.
(mho)
