finance
GameStop Acquires Stake in eBay
GameStop Corp. is preparing a takeover bid for eBay Inc., leading to a surge in shares for both companies. eBay's stock rose more than 13% in after-hours trading, while GameStop gained 7%. The move comes as GameStop, under Ryan Cohen, builds a position in eBay ahead of an offer expected this month.
May 1, 6:27 PM·1m read2 sources
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GameStop Corp. , sending eBay shares jumping more than 13% in after-hours trading on Friday. The video-game retailer has been quietly building a stake in eBay's shares ahead of a potential offer, according to the Wall Street Journal.
GameStop plans to make an offer for eBay this month. Led by Ryan Cohen, GameStop has been building a position in the online auctioneer. Cohen, the founder of Chewy, plans to turn the combined companies into a retail juggernaut, the Wall Street Journal reported.
EBay shares jumped about 10% in extended trading, while GameStop shares gained 7%. 8 billion before the news broke, and eBay has a market value of around $46 billion.
GameStop has a market value of nearly $12 billion. Spokespeople for eBay and GameStop did not immediately respond to requests for comment. Both companies have struggled to adapt to changing consumer preferences, with GameStop shutting stores and emphasizing collectible toys and trading cards as more video games are purchased online.
EBay has been pushing collectibles and used goods on its marketplace, which overlap with GameStop's customer base. Limited releases and hard-to-find items are often sold at a markup on eBay to capitalize on their popularity and scarcity. In January, GameStop unveiled a compensation package worth roughly $35 billion for Ryan Cohen, hinging on a turnaround that requires lifting the company's market capitalization to $100 billion and hitting $10 billion in cumulative performance EBITDA.
GameStop's shares have slumped from all-time highs hit in 2021 during the pandemic-era meme-stock rally. If eBay is not receptive, Cohen could decide to take the offer directly to the e-commerce company’s shareholders, the Wall Street Journal said, citing people familiar with the matter. Details of the potential offer could not be learned.
