Ryan Cohen, who became GameStop's CEO in 2023, is intensifying his efforts to acquire eBay, having previously proposed a $56 billion bid that was rejected by eBay's board. This week, GameStop announced that it would withdraw a controversial bonus plan for Cohen that could have paid him up to $35 billion based on performance metrics, including increasing GameStop's market cap to $100 billion.
The company's current market cap is around $10 billion, raising doubts about the viability of the acquisition. Cohen has stated that the funding for the deal would be structured as half cash and half stock, with plans to issue more stock to facilitate the acquisition.
However, analysts remain skeptical, noting that Cohen has not adequately addressed concerns regarding financing and operational risks associated with the deal. Meanwhile, eBay's management is focused on its own turnaround strategy, which has been well-received by investors, further complicating Cohen's ambitions.
Despite his commitment, the lack of a clear funding strategy and the significant gap between the two companies' valuations leave many questioning the practicality of Cohen's acquisition plans