finance
GameStop Proposes $56 Billion Cash-and-Stock Acquisition of eBay
U.S. stock indexes fell from recent highs while oil prices jumped over 5% following reported attacks in the Middle East amid ongoing tensions with Iran. GameStop proposed acquiring eBay for about $56 billion in cash and stock, sending shares of both companies moving in opposite directions.
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U.S. stock futures pointed to a lower open on Monday amid uncertainty over Middle East tensions that have contributed to higher oil prices. Brent crude jumped as high as $114.21 per barrel according to market reports. The Sydney Morning Herald reported that the ASX was set to fall 0.9 percent with futures indicating a 0.4 percent loss on Monday while the Reserve Bank of Australia is scheduled to announce its interest rate decision on Tuesday with markets pricing a 75 percent chance of a hike.
GameStop proposed to acquire eBay for about $56 billion in a combination of cash and stock. The offer values eBay at approximately $125 per share compared with its Friday closing price of $104.07. GameStop has already built a roughly 5 percent stake in eBay.
The proposal is structured as 50 percent cash and 50 percent stock. GameStop CEO Ryan Cohen signaled the bid according to CoinDesk.
The bid highlights potential to cut $2 billion in annual costs quickly. Market reaction showed GameStop shares declining around 4.5 to 7.8 percent in pre-market trading while eBay shares rose between 5.4 and 8.5 percent according to multiple reports including Newsquawk, Morning Brew and the New York Post.
GameStop’s market value is about $12 billion compared with eBay’s approximately $46 billion. Michael Burry has said that GameStop acquiring eBay makes “perfect sense” according to Unusual Whales.
Amazon separately announced it is opening its global supply-chain network to all businesses. The new service called Amazon Supply Chain Services includes freight, distribution, fulfillment and parcel shipping according to Reuters, the Wall Street Journal, TechCrunch and The Verge. The move positions the company to handle deliveries for external businesses.
Several companies reported quarterly earnings. Tyson Foods exceeded analysts’ expectations for both profit and revenue with beef revenue rising on 11.5 percent higher prices despite lower volume along with increased sales of chicken and pork according to the Sydney Morning Herald.
