Wire flash
FinanceGameStop holds nearly 10% of eBay, SEC filing shows
Editorial responsibility
- No named human review is recorded for this page.
- Source reporting is collected, normalized, translated or condensed automatically when needed.
- Automatically published source-backed update
GameStop disclosed in an SEC filing that it now owns 43.4 million shares of eBay, representing a 9.8% stake, up from a 5% economic stake in early May. The videogame retailer's CEO, Ryan Cohen, had previously made an unsolicited $56 billion cash-and-stock offer to buy eBay, which was rejected as 'neither credible nor attractive.' Cohen has since converted derivatives into common shares, including settling 39 million eBay shares from put/call pairs. He stated in a Bloomberg interview, 'We're coming for eBay one way or another,' and has committed $500 million of his own money to the deal. GameStop shareholders approved increasing authorized shares to provide more flexibility. Wall Street has questioned the financing plan, which relies on a non-binding $20 billion debt commitment from TD Securities contingent on an investment-grade credit rating. Cohen declined to raise his offer, saying he would not 'negotiate against myself.'
Source report
By: Svea Herbst-Bayliss Source: Reuters
Video game retailer GameStop has disclosed in a regulatory filing that it now owns nearly 10% of e-commerce company eBay, signaling its determination to pursue an acquisition despite eBay's rejection of its unsolicited offer.
According to the filing, GameStop holds 43.4 million outstanding shares of eBay, representing 9.8% ownership. This marks a significant increase from early May, when GameStop CEO Ryan Cohen informed eBay's board chairman of the company's intent to acquire eBay for approximately $56 billion.
At that time, Cohen stated that GameStop had "accumulated a 5% economic stake" through derivatives and beneficial ownership.
Key Developments
- Conversion to common shares: Over recent weeks, GameStop converted its economic stake into common shares.
- June purchases: Last month, GameStop bought 3.5 million eBay shares for roughly $381 million.
- Friday settlement: The company settled 39 million eBay shares from put/call pairs, the filing stated.
An eBay representative was not immediately available for comment.
Cohen's Public Statements
In a second filing made on Friday, Cohen stated: "I'm not going to call my shots, but we're coming for eBay one way or another." That filing transcribed his interview with Bloomberg Television on Thursday.
Two months ago, when Cohen first proposed buying the company—roughly five times the size of his own—he argued that a tie-up between GameStop and eBay, a company he would run, would create a stronger competitor to Amazon.
eBay's Response and Ongoing Efforts
eBay rejected Cohen's cash-and-stock offer in May, calling it "neither credible nor attractive."
Since then, Cohen has stated in multiple interviews that he will press ahead with his plans. GameStop shareholders last month approved an increase in the company's authorized share count, providing greater flexibility. Cohen is also contributing $500 million of his own money to the transaction.
Financing Concerns
Wall Street has repeatedly questioned GameStop's planned financing, which relies heavily on a non-binding commitment letter from TD Securities for up to $20 billion in debt. That commitment is contingent on the combined company achieving an investment-grade credit rating.
In the Bloomberg interview, Cohen said: "There has been a complete failure by the media to explain why this transaction makes sense." He added that GameStop has a "highly confident" letter from its bankers and "a lot of parties that are interested in this transaction."
When asked whether he would raise his offer to buy eBay, Cohen replied: "I'm not going to negotiate against myself."
(Reporting by Svea Herbst-Bayliss in New York and Anhata Rooprai in Bengaluru; Editing by Jonathan Ananda and Chris Reese)
Source
Yahoo FinanceWestern
Part of this Story
GameStop owns nearly 10% of eBay, SEC filing shows