GameStop · eBay · Ars Technica
eBay rejects GameStop's $56 billion offer: "Your proposal is neither credible nor attractive"
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EBay’s board of directors today rejected GameStop’s $55.5 billion offer to buy the company.
Key facts
- Cohen receives no salary or other guaranteed pay but could make $35 billion if GameStop hits a $100 billion market capitalization and $10 billion in cumulative earnings
- A Halo 2 Master Chief statue is fetching almost as much, and a Ken Griffey Jr. rookie card has a high bid of over $11,000
- GameStop said it was on track to secure up to $20 billion in debt and offered to buy eBay for $125 per share, half in cash and half in GameStop stock
- EBay’s board of directors today rejected GameStop’s $55.5 billion offer to buy the company
Summary
“We have concluded that your proposal is neither credible nor attractive,” eBay Chairman Paul Pressler wrote in a letter to GameStop CEO Ryan Cohen. “The team have taken into account such factors as 1) eBay’s standalone prospects, 2) the uncertainty regarding your financing proposal, 3) the impact of your proposal on eBay’s long-term growth and profitability, 4) the leverage, operational risks, and leadership structure of a combined entity, 5) the resulting implications of these factors on valuation, and 6) GameStop’s governance and executive incentives,” Pressler said. GameStop made the surprising offer last week. eBay’s rejection “could lead to a hostile bid” because Cohen has “said he was willing to take the offer directly to eBay shareholders, possibly by calling a special meeting,” Reuters wrote. Cohen struggled in an awkward CNBC interview to explain how GameStop would pay for the bigger company.