Key Takeaways:
Ryan Cohen told investors he won't walk away from his $56 billion pursuit of eBay, even after the e-commerce company's board rejected his unsolicited bid as "neither credible nor attractive."
GameStop Corp. Chief Executive Officer Ryan Cohen will forgo a potential $35 billion performance-based compensation award to keep the videogame retailer's leadership focused on its operating turnaround and the proposed acquisition of eBay Inc., the company said Tuesday.
"I'm not going to stop, I'm not going to go away," Cohen said on the All-In podcast Wednesday, making clear his unsolicited run at the e-commerce platform is not a pose. The billionaire investor, who built his reputation founding Chewy Inc. before joining GameStop's board in January 2021 and becoming CEO in September 2023, has been pressing ahead with what would be one of the most audacious takeovers in recent history.
GameStop, which has a market value of roughly $10 billion, is trying to acquire a company nearly five times its size. The videogame retailer offered about $56 billion in cash and stock for eBay in May, a proposal the target's board swiftly rejected, citing financing doubts. GameStop said it will release additional materials this week detailing the strategic rationale and operational plan for a combined company, including a presentation for investors.
The $35 Billion Question
The compensation package GameStop unveiled for Cohen in January was worth roughly $35 billion, contingent on him lifting the company's market value more than tenfold and sharply boosting profit. By forgoing the award, Cohen is signaling that management's attention should remain on both GameStop's operating performance and the eBay pursuit — not on personal financial incentives.
Cohen has already demonstrated he can turn around GameStop. Through aggressive cost cutting that included shuttering hundreds of stores, he steered the company back to profitability. Earlier this month, GameStop posted a 14% rise in quarterly revenue to $835.3 million for the period ended May 2, up from $732.4 million a year earlier, buoyed by strong demand for collectibles. The board also approved a new $2 billion share repurchase program.
Can GameStop Afford eBay?
The size mismatch between the two companies remains the central question for investors and analysts. GameStop's $10 billion market capitalization means Cohen would need substantial outside financing to complete a $56 billion transaction. Bankers and lawyers have questioned where the money would come from, given GameStop's first-quarter net sales of $835.3 million and its relatively modest cash position.
EBay's board rejected the initial offer in May, calling it "neither credible nor attractive." An eBay spokesman declined to comment on GameStop's latest statement. The company's resistance has done little to deter Cohen, who has a track record of defying skeptics — from his early days building Chewy into a pet-retail powerhouse to his role in the meme-stock phenomenon that reshaped GameStop's shareholder base.
For Cohen, the eBay bid represents a chance to transform the e-commerce company into a bigger competitor to Amazon.com Inc. The question now is whether he can secure the financing and convince eBay's board to engage — or whether he will take his case directly to shareholders.
This article is for informational purposes only and does not constitute investment advice.
