GameStop slides 10% as CEO dodges eBay bid questions
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- GameStop shares fell more than 10% on Monday as investors questioned how the company would finance its $55.5bn unsolicited bid for eBay, with the company valued at roughly $12bn against eBay's $46bn market cap.
- Ryan Cohen, GameStop's CEO, told CNBC's Squawk Box he 'didn't understand' repeated questions about the funding gap, pointing instead to deal details posted on GameStop's website rather than explaining the missing financing.
- GameStop's letter outlines a half-cash, half-stock offer at $125 per eBay share, citing about $9.4bn in cash on hand and $20bn in potential debt financing from TD Securities — totaling roughly $40bn, or $16bn short of the bid.
- Cohen confirmed he had held no conversations with eBay about the proposal, and eBay separately said it would not comment further until its board of directors had fully considered the offer.
- Cohen became a retail-investor figurehead known as the 'meme king' after GameStop's viral 2021 meme-stock surge, a backstory now colliding with a takeover bid that is roughly 4.6 times GameStop's own market valuation.
Why it matters: GameStop's $12bn market cap is attempting to swallow a $46bn company, and the $16bn financing gap Cohen refused to address on live TV triggered an immediate 10%+ stock slide — meaning shareholders are pricing in the possibility that the bid is unserious or that Cohen may turn to heavy stock issuance to bridge the gap, diluting existing holders.
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