eBay To GameStop CEO Ryan Cohen: Um, No

from the playing-games dept

It might be time to do a wellness check on GameStop CEO Ryan Cohen. We had just discussed Cohen’s announced bid to have GameStop buy eBay as part of an absolutely bizarre interview he did on CNBC’s Squawk Box. In that interview, Cohen attempted to explain how GameStop would buy the much more highly valued company, valued at $56 billion, through $20 billion in stock and another $20 billion in private investment with banking partners. If you’re still staring at those numbers trying to figure out where the typo is, don’t bother, there isn’t one. The typo exists only in Cohen’s head, since those numbers don’t match up to eBay’s valuation. Nobody but Cohen appeared to understand how any of this made any sense.

It appears that eBay’s board felt likewise. eBay has now issued a response to Cohen’s bid, which essentially amounts to, “Um, no.”

CNBC reports that eBay’s board wrote to Ryan Cohen on Tuesday, May 12, to make clear its categorical rejection of the silly man’s ridiculous attempt to buy a company five times larger than his own with borrowed money and bad math. A letter signed by eBay’s chairman of the board of directors, Paul S. Pressler, calls his offer “neither credible nor attractive.”

“We have taken into account such factors as 1) eBay’s standalone prospects, 2) the uncertainty regarding your financial 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.”

That’s the corporate equivalent of a professional UFC fighter explaining to an 11 year old why they won’t agree to a televised fight. I have no idea what Cohen is doing in any of this, but I can’t possibly believe that this proposed purchase was in any way serious. As we said in the previous post, the math simply doesn’t math in this case.

But in follow up comments from journalists after the CNBC interview, things only get more strange. Imagine having a serious shareholder position in GameStop and coming across this portion of a Cohen interview with Business Insider.

“I did not want to be the CEO of GameStop. I want to be the CEO of eBay,” he said. “I’m passionate about eBay. I believe in eBay’s business. I wasn’t passionate about GameStop. That’s the difference.”

Honestly, it’s hard to understand both what Cohen is actually after here and why the board at GameStop even wants him around anymore. He doesn’t want to be there. The company is not doing well. The headlines about buying eBay are the most tangible thing about the story, with everything else being vapor and criticism.

But what’s abundantly clear is that GameStop will not be buying eBay any time soon, no matter how much Game Informer vault merchandise Cohen manages to sell online.

Filed Under: acquisition, paul pressler, ryan cohen, wtf

Companies: ebay, gamestop