GameStop (GME) shareholders are no strangers to controversy or outrageous corporate decisions. Staying true to this reputation, GameStop CEO Ryan Cohen announced in January that the company was looking at a “very big” acquisition. While I previously wrote about speculation around Best Buy (BBY) as the target company, we now know that the name on Cohen’s watchlist was eBay (EBAY). Yes, a company with a $47.8 billion market capitalization is the acquisition target of a firm that itself has a market cap of just $10.8 billion. Sounds crazy, doesn’t it?
Well, wait until you hear how the CEO explained the move in an interview. When CNBC presenter Andress Ross Sorkin laid out the math for Cohen, all he got in return was that the deal was “half cash, half stock." With GameStop's market cap at nearly $11 billion, $9 billion of cash on the balance sheet, and a $20 billion financing letter from TD Securities, there’s still about $16 billion needed to reach the $56 billion that Cohen is offering for eBay.
