Video game retailer GameStop has announced its acquisition of eBay for a record amount
4 May 15:45
GameStop, the world’s largest video game retailer, has announced its intention to acquire the online resale giant eBay for $55.5 billion.
Details of the deal were published in the Financial Times, according to "Komersant Ukrainian".
GameStop already owns 5% of eBay’s shares and is offering $125 per share, which is 46% higher than eBay’s closing price on February 4. The offer consists of half cash and half stock. In a letter to eBay’s board chairman, GameStop CEO Ryan Cohen emphasized:
“GameStop’s approximately 1,600 stores in the U.S. can provide eBay with a nationwide network for authentication, pickup, order fulfillment, and live commerce.”
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What is known about GameStop
Over the past few decades, GameStop has lost ground in the video game market due to the shift toward online shopping. However, the company’s value skyrocketed in 2021 during the so-called “meme stock” craze, when retail investors bought shares en masse, dealing a blow to major short sellers.
GameStop’s market capitalization has fallen from its 2021 peak but remains significantly higher than before the “meme stock” frenzy began. At the time of the deal announcement, GameStop was valued at approximately $11.9 billion, while eBay was valued at $46 billion.
Following the announcement of the offer, eBay shares rose more than 10% to $114.74 in premarket trading on Monday, while GameStop shares rose about 4%.
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What is known about eBay
eBay is a global online marketplace where people and companies buy and sell virtually any product: from collectible stamps and used clothing to the latest electronics and cars.
The first item sold on eBay in 1995 was a broken laser pointer for $14.83. Founder Pierre Omidyar was surprised and asked the buyer if they realized the pointer was defective. The buyer replied:
“I collect broken laser pointers.”
