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US video games retailer GameStop has offered to buy eBay for $55.5bn (£41bn) in an unsolicited bid that its boss warned could turn hostile if the proposal is rebuffed by eBay’s board.
Key facts
His cost-cutting plan would slash $1.2bn from eBay’s annual sales and marketing budget, another $300m from product development, and $500m from administrative departments including HR, legal support
Those investors sent GameStop shares up from $3.25 in April 2020 to $347.50 in late January 2021, a rise of 10,692%
GameStop, which has quietly accumulated a 5% stake in eBay, said it was willing to pay $125 a share, split 50-50 between cash and stock
It came days after eBay reported first-quarter results, having reported revenue of $3.09bn, beating analysts’ estimate of $3.04bn, as it stepped up its use of AI to improve communication
Summary
GameStop, which has quietly accumulated a 5% stake in eBay, said it was willing to pay $125 a share, split 50-50 between cash and stock. It is an ambitious move by the games company, which catapulted to fame during the meme-stock craze of 2021 but is worth far less than its takeover target. But Ryan Cohen, who has run GameStop since 2020, claims eBay could be worth much more under his leadership, saying in a letter to eBay chair, Paul Pressler, that he would immediately launch a cost-cutting programme that would slash $2bn worth of spending a year. “Ebay should be worth, and will be worth, a lot more money,” Cohen told the Wall Street Journal.