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Market Capitalization Comparison
Comparison of market capitalization between GameStop and eBay as per latest financial data.
Primary Sources
Should Investors Consider GameStop's Bid For eBay Serious?
I'll give Ryan Cohen and his team at GameStop (GME 3.71%) credit -- they're working hard to remake the meme stock darling of retail investors. First, Cohen announced plans in February to turn the video game retailer into a holding company, like Berkshire Hathaway. And now GameStop is setting its sights on acquiring a much larger company, announcing on Sunday that it has made an unsolicited offer to purchase eBay (EBAY +0.46%) at $125 per share in a cash-and-stock deal. The offer values eBay, a leading e-commerce company, at about $55.5 billion and represents about a 20% premium to eBay's closing stock price last week. GameStop currently has a market capitalization of nearly $11 billion, while eBay has a market capitalization of about $46.7 billion. However, the market doesn't seem to be taking Cohen's bid seriously. GameStop stock dropped 8% this week, while eBay stock rose by only 2% as of this writing. That indicates to me that investors don't expect GameStop to close the deal -- if they did, eBay stock would be trading close to the $125 figure that GameStop offered. Let's take a closer look at this deal. Image source: Getty Images. How would GameStop pay for eBay? This is the crux of the issue -- it's not every day that you see a much smaller company trying to absorb a larger one. Cohen says the deal would be split 50% cash, 50% stock, though he raised the possibility of share dilution to make it work. "We have the ability to issue stock in order to get the deal done," he told CNBC. GameStop also has a $20 billion financing letter from TD Bank and $9.4 billion in cash and cash equivalents on its balance sheet. The company says it's already acquired 5% of eBay stock, and will achieve $2 billion in cost savings within the first year through reductions in sales and marketing, product development, and corporate overhead. Today's Change(-3.71%) $-0.90Current Price$23.38 The company's proposal outlines a prospective business where GameStop's 1,600 brick-and-mortar locations can serve the combined company as a national network for authentication of goods, intake, fulfillment, and live commerce. "eBay supplies the inventory and the buyer base; GameStop supplies the physical footprint to compete in the live-commerce category," the company says in GameStop's proposal. Cohen told the Wall Street Journal that the deal will help the company take a step toward being a legitimate e-commerce competitor to Amazon. Today's Change(0.46%) $0.50Current Price$108.19 Is this...
Why GameStop's bid for eBay echoes one of the worst ... - Fortune
By the start of 2000, I was already a veteran writer for Fortune warning our readers that the dot.com craze had lifted Nasdaq valuations to unsustainable highs. All of the time-honored metrics pointed to the same outcome—crash ahead! Then, AOL and Time Warner, Fortune‘s parent as owner of magazine-maker Time Inc., issued a shocker for the ages that, as it turned out, confirmed my worst fears: The tiny internet hotshot, its brand barely a decade old, was purchasing the fabled media colossus multiple times its size. For the announcement at Time Warner’s Manhattan headquarters, the news and entertainment empire’s CEO Jerry Levin, appearing digital-era hip sans tie or jacket, took the stage alongside AOL chief Steve Case, and avowed his delight at taking Case’s offer, allowing that though dot.com valuations looked exorbitant, “I accept them.” Today, that transaction is generally cited as epitomizing arguably the craziest interlude in the annals of U.S. equity markets, and vilified as the worst big deal ever. So bad that no transaction based on similar terms, where minnow swallows the whale for a king’s ransom, could happen again, or even be floated, right? Not so. When this journalist saw news of GameStop’s bid for eBay on Sunday, May 3, I instantly thought of all the offer’s parallels to AOL-Time Warner. Most of all, the buyers’ motives match in that both are now (in GameStop’s case relatively) riding high, but face dim prospects ahead. Their solution: Using their inflated stock to land a sound money-maker that via the combo, will retain a lot more value for their shareholders than going it alone, and promising moonshot synergies to sell the deal. Predictably, GameStop’s claims for the tie-up’s benefits echo the fantasy forecasts for AOL-Time Warner. Hence, it’s worth examining how the GameStop-eBay math resembles the AOL-Time Warner numbers. And how fundamentals like those for the both the 2000 wonder and its 2026 cousin, promise to doom any union from the start. GameStop would pay a giant premium for a high-flying stock, and multiply its share count to clinch a deal GameStop offered $55.5 billion, or $125 a share for eBay; the video game and collectibles purveyor’s CEO, Ryan Cohen, stated that the deal provides for half cash and half stock. GameStop had already secretly bought 5% of eBay shares before the announcement, starting on February 4th. Measured from that date, it’s offering a towering premium of 46%. Those purchases likely contributed to a rece...
GameStop Bid Puts eBay Valuation Governance And Marketplace Future In Focus
2 things going right for eBay that this headline doesn't cover. GameStop's US$56b, partly stock-funded proposal immediately puts a spotlight on eBay's valuation, governance, and deal risk.
'Meme stock' GameStop's brave bid for recommerce giant eBay is ...
GameStop's bold bid to buy eBay marks the rise of a struggling video game retailer to a meme stock powerhouse. Recommerce giant eBay's journey was almost the reverse, from pioneer to second-best as it lost ground to Amazon despite steady growth.
