<\/p>\n
Is Ryan Cohen giving up on eBay? Not according to Bloomberg\u2019s Monday, Aug. 10, report, but the ambition has clearly shrunk. Six weeks ago, Cohen told Bloomberg TV he was coming for eBay \u201cone way or another.\u201d<\/p>\n
Now, people familiar with the matter tell Bloomberg that GameStop\u2019s CEO is weighing whether to withdraw his $56 billion takeover bid entirely.<\/p>\n
From takeover to partnership pitch<\/p>\n
In place of full ownership, Cohen is reportedly considering a joint venture that would let eBay tap GameStop\u2019s roughly 1,600 U.S. retail stores, according to Bloomberg.<\/p>\n
The goal would be growing both companies\u2019 presence in trading cards and collectibles, categories where they already compete. GameStop would also seek seats on eBay\u2019s board as part of any partnership, Bloomberg reported.<\/p>\n
Related: GameStop just cleared a hurdle nobody was watching<\/p>\n
GameStop has not made a final decision, and Cohen could still pursue other options, Reuters reported Aug. 10. GameStop shares rose roughly 1.6% in early trading, while eBay fell about 2.2%, according to Reuters.<\/p>\n
Investors appear to be reading the retreat as relief rather than defeat, a reversal from Cohen\u2019s tone in June, when he told Barron\u2019s in a securities filing that eBay was simply \u201ca great business that\u2019s been poorly managed.\u201d<\/p>\n
GameStop’s financing math fell short<\/p>\n
The original offer, filed in May as a non-binding proposal, priced eBay at $125 a share in half cash and half stock, a 46% premium to where eBay traded before GameStop began buying.<\/p>\n
EBay\u2019s board rejected it nine days later, calling the proposal \u201cneither credible nor attractive\u201d in a letter disclosed in an SEC filing. The board\u2019s stated objection was financing, not price.<\/p>\n
That skepticism proved contagious. Michael Burry, the investor known for betting against subprime mortgages before 2008, sold his entire GameStop stake days after the bid became public. \u201cI of all people should have known,\u201d he wrote, according to Yahoo Finance.<\/p>\n
Burry had spent months promoting an \u201cInstant Berkshire\u201d thesis for GameStop, and said the debt load required to close a deal this size never fit the disciplined, low-leverage company he had backed.<\/p>\n
The numbers explain why. GameStop\u2019s market value has fallen to roughly $8.6 billion, according to Bloomberg, barely above the $8.4 billion in cash the company holds.<\/p>\n
A company whose equity value barely clears its own cash pile has little room to borrow the tens of billions needed to buy a target nearly six times its size.<\/p>\n
GameStop CEO Ryan Cohen is reportedly weighing a smaller eBay partnership after his $56 billion takeover bid stalled on financing concerns.<\/p>\n
Brandon Bell / Getty Images<\/p>\n
GameStop weakens as eBay stock climbs<\/p>\n
Since GameStop\u2019s offer in May, its stock has fallen 28%, while eBay\u2019s has climbed 7.6%, according to GuruFocus. That gap works against an acquirer paying partly in its own stock.<\/p>\n
GameStop kept building its eBay position anyway, reaching a 9.75% stake by mid-July, a persistence I examined in June, making it eBay\u2019s second-largest shareholder behind only Vanguard\u2019s index funds.<\/p>\n
More GameStop:<\/p>\n
GameStop just cleared a hurdle nobody was watchingRyan Cohen passes on GameStop payday to keep pushing one acquisitionNo, GameStop is (probably) not buying eBay \u2014 here\u2019s why<\/p>\n
That buildup is what makes today\u2019s pivot notable. GameStop shareholders voted in July to authorize up to 2.5 billion Class A shares, a move tied directly to funding a bigger stock component of a future eBay bid.<\/p>\n
A partnership requires none of that currency, which raises a fair question about why the vote happened at all if the plan was shifting toward something smaller.<\/p>\n
The categories in today\u2019s proposal are not random, either. Collectibles and trading cards made up 41.8% of GameStop\u2019s first-quarter revenue this year, up from 28.9% a year earlier, according to a GameStop earnings release.<\/p>\n
A joint venture solves a real problem without the borrowing that worried eBay\u2019s board. GameStop gains access to eBay\u2019s collectibles marketplace and its buyer base, while eBay gains physical stores that can authenticate and sell goods, something no online marketplace easily replicates on its own.<\/p>\n
Big swings that shrink are becoming the norm<\/p>\n
Cohen\u2019s retreat fits a pattern bigger than GameStop. High-profile buyers who make outsized bids for much larger targets, then scale back once financing questions mount, are becoming a recurring feature of this dealmaking cycle, rather than an exception.<\/p>\n
Elon Musk\u2019s renegotiated Twitter acquisition in 2022 followed a similar arc, with an audacious opening bid giving way to public resistance and then a smaller, more defensible outcome.<\/p>\n
For GameStop shareholders, the lesson isn\u2019t that Cohen failed. It\u2019s that markets increasingly punish reach before they reward ambition, pushing even confident buyers to negotiate down from headlines to something their balance sheet can actually support.<\/p>\n
Whether Cohen can turn that smaller ask into an actual signed agreement, after two rejections already, is the next test investors should watch.<\/p>\n
Related: Ryan Cohen passes on GameStop payday to keep pushing one acquisition<\/p>\n
#eBay #deal #Ryan #Cohen #swore #wanted #falling<\/p>\n","protected":false},"excerpt":{"rendered":"
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