Chapter 1: What is the unsolicited offer GameStop made to eBay?
My name is Lauren Thomas, and I am a deals and activism reporter here at The Wall Street Journal.
And Lauren, we're talking to you because there was a proposed merger and acquisition, proposed deal that caught a lot of people's eyes recently. Can you tell us what that is?
Yes. Big headline number for sure. GameStop officially submitted a proposal, a $56 billion proposal to acquire eBay.
Right.
GameStop, which is worth about $11 billion, was offering to buy a company four times that size, eBay, the commerce giant. What did you think when you heard that?
Yeah, I mean, probably like everyone else, was scratching my head a little bit.
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Chapter 2: How does Ryan Cohen justify the acquisition of eBay?
You don't often see these smaller companies coming out and trying to buy much larger businesses. So that in and of itself, I think, provides some shock value.
So Lauren called the man behind this audacious plan, Ryan Cohen, the CEO of GameStop.
walk through what ultimately led you to eBay?
I think that eBay under my watch, it really comes down to scale. Yeah. Being able to do something big. Right. And I think eBay, there's nobody... who is more qualified based on my experience to run the eBay business.
Chapter 3: What challenges does GameStop face in financing the eBay deal?
I could turn that business into something worth significantly more than what eBay is today.
Yeah.
And I can grow it and I can make it a lot more money in a very short period of time. And it could be like a legit competitor to Amazon.
For Lauren, the deal raises a big question.
As an M&A reporter, anytime you see a deal, I'm always asking myself, well, how are they going to pull this off, particularly in terms of financing? How are they going to pay for it?
Welcome to The Journal, our show about money, business, and power. I'm Jessica Mendoza. It's Friday, May 8th.
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Chapter 4: What is Ryan Cohen's vision for transforming eBay?
Coming up on the show, GameStop makes a play for eBay. Ryan Cohen got his start with the online pet supply store Chewy, a company he co-founded in 2011 and sold to PetSmart. Since then, he's built an online following as an investor. And what is the allure around Ryan Cohen? I mean, he's not exactly a household name, but he is kind of a cult figure.
Totally. I think why so many people ultimately have found themselves connecting to Ryan and being drawn toward Ryan is he does in a lot of ways kind of represent the everyday average Joe kind of role.
Trader, investor, he's just kind of your anti-Wall Street guy that's definitely struck a chord with a lot of people, particularly younger people coming up in this world and trying to find ways to make money on their own.
Cohen built that reputation in 2020 when he took an interest in the company that would come to define his career, GameStop.
Ryan Cohen had been building a stake in this company, had by then built a pretty significant stake, making him one of the biggest shareholders in GameStop.
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Chapter 5: How has Ryan Cohen's leadership impacted GameStop's operations?
And he basically showed up and started pushing for changes. He wanted new management. He wanted GameStop to rethink things strategically. And it was really an activist play in large part. He was there. He was trying to get inside the company himself, you know, in some sort of leadership position.
In January 2021, GameStop offered Cohen a seat on the board. And around that time, the company's share price exploded.
It went crazy, exactly. Shares of GameStop were up 134% today, continuing an unlikely rally.
Chapter 6: What are eBay's current strengths and weaknesses in the market?
The battle between short sellers and a group posting on Reddit with the stock shooting up and fluctuating wildly.
GameStop shares have now risen some 700%. Retail investors, especially people on Reddit, took the company's stock price from less than $5 a share in 2020 to a high of almost $500 a share.
Ryan Cohen became part of this community and really spoke to this community of people that started rallying behind him, and he kind of became the chosen one.
The meme overlord in Ryan Cohen, the meme king of Wall Street, is striking again.
He is the meme stock king because of his role at GameStop. A few months after joining, Cohen became chairman of the board and then became CEO in 2023. Since taking the helm, he's focused on making GameStop profitable.
Under Ryan Cohen's leadership, GameStop has shuttered thousands of stores, you know, in malls all across the U.S. and Canada.
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Chapter 7: Does eBay need the turnaround that Ryan Cohen proposes?
And so, you know, when you talk to Ryan, it's all about cutting costs, you know, getting the business profitable again, where it's producing cash flow.
The company has managed to turn a profit and currently GameStop trades at around $25 a share. Pretty healthy, but far from the company's meme stock high. And sales have fallen in recent quarters.
But that is probably in part, you know, why Ryan Cohen is looking to do something big because he, you know, from his perspective, he needs to make big moves, possibly pursue a big deal in order to keep growing the business.
And you spoke to Cohen over the weekend about his proposed deal with eBay. What did he say? What is his business case for it?
So in talking to Ryan Cohen, he's laid out the case for why he wants to do this deal. He told me, you know, this is a company that he thinks could not just be worth 50, 56 billion dollars, but it could be worth hundreds of billions of dollars if he was running it.
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Chapter 8: What could happen if eBay rejects GameStop's offer?
I'm thinking about turning eBay into something worth hundreds of billions of dollars.
Yeah.
Then we'll see what happens.
Right.
Right. I'm focused on, I'm going to be as focused on eBay and as personally involved as I've been in getting the GameStop turnaround for, for the next few years.
Right. Now that this has started to get out, like maybe there's like some negative, like criticism out there. Oh, how does he pull this off? How would you respond to that? I guess.
Well, look at GameStop.
Right.
And all the naysayers.
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