GameStop (GME) is reportedly eyeing an acquisition of eBay

Video game retailer GameStop is preparing an offer to acquire eBay, according to the Wall Street Journal.

GameStop is reportedly preparing an offer to acquire online auction platform eBay. This would be a massive deal for the utilized video game retailer as eBay is valued over three times the market capitalization of GameStop.

Ryan Cohen, CEO of GameStop — Source: u/ButtFarm69

The Wall Street Journal was first to report that GameStop is preparing a bid for eBay, stating that the company has been building a stake in the auction platform ahead of a potential offer. GameStop (GME) is currently valued at around $11 billion with eBay now trading at a $45 billion valuation, so whatever deal GameStop’s board is cooking will have to involve some amount of leverage. This would not be the first acquistion financed by debt we have seen in the gaming space as Electronic Arts was acquired last year in a $55 billion leveraged purchaseout deal just last year.

GameStop currently holds around $9 billion of cash and marketable securities, which means the company would have to issue a considerable amount of debt to finance what would be an over $45 billion deal to acquire eBay. GameStop CEO Ryan Cohen is certainly motivated to execute such a deal as it would accelerate his progress towards stock-based compensation incentives.

WSJ is also reporting that GameStop may put the offer directly to eBay shareholders if the company is not receptive to a deal.

Weekly bar chart displaying eBay stock at an all-time high share price.

Both stocks are up in afterhours trading on this news, with eBay shares sitting at an all-time high price. Keep it locked on Shacknews for all the latest GameStop news as it breaks.

This article is only meant for educational purposes, and should not be taken as investment advice. Please consider your own investment time horizon, risk tolerance, and consult with a financial advisor before acting on this information.

Full Disclosure:

At the time of this article, Shacknews primary shareholder Asif A. Khan, his family members, or his company Virtue LLC had the following positions:

Long GameStop via GME shares

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Asif Khan is the CEO, EIC, and majority shareholder of Shacknews. He launched his career in video game journalism as a freelancer in 2001 for Tconcludeobox.com. Asif is a CPA and was formerly an investment adviser representative. After much success in his own personal investments, he retired from his day job in financial services and is currently focutilized on new private investments. His favorite PC game of all time is Duke Nukem 3D, and he is an unapoloreceiveic fan of most things Nintconcludeo. Asif first frequented the Shack when it was sCary’s Shugashack to find all things Quake. When he is not immersed in investments or gaming he is a purveyor of fine electronic music. Asif also has an irrational love of Cleveland sports.

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