00:00One of the big conversations dominating the sidelines of the Milken conference is GameStop's unexpected bid to buy eBay.
00:07GameStop's CEO Ryan Cohen says he has the financing to acquire the online retailer, but that eBay's board didn't appreciate
00:14his critiques of the company.
00:16Bloomberg's Spencer Soper covers eBay and is in New York and joins us now.
00:20So, Spencer, this is an interesting one because the big question for me and for so many people is how
00:25on earth does a GameStop fund a $56 billion bid for eBay,
00:28which is a company that's more than four times its market cap? And the answer usually comes down to debt.
00:33Yeah, that's the big question. And I don't pretend to have ever sat in the middle of billion dollar deals.
00:39So I try to think of like a scenario that might be more relatable.
00:42And I almost feel like Ryan is like a freshman at SUNY Stony Brook and he's got a girlfriend at
00:49like the University of Miami.
00:51You know, he wants to go down and visit her over spring break, but he can't afford to do it
00:54by himself.
00:55So he's trying to get everybody excited about going in and renting a van and going down to Miami.
01:01But the rest of the pack doesn't have a girlfriend in Miami.
01:03So the girlfriend's kind of like his big pay package for growing GameStop's market cap.
01:08But he just has this incentive that no one else has and he needs all of their money to do
01:13it.
01:13So there's like this mismatch.
01:15There's a mismatch, but he does have a letter from TD Bank, a highly confident letter to provide $20 billion
01:20in debt financing.
01:22What does that actually mean?
01:23That means he's got gas money to get to North Carolina.
01:26You know, he doesn't have enough to get all the way to Miami, you know, to stick with this analogy.
01:31So he's still got a gap on how to make this happen.
01:34And the credit markets are already reacting and saying this would be, you know, credit negative.
01:38That basically on the other end of the line of this deal, you'd end up with a GameStop eBay combo
01:44that's saddled with debt to the point that it's potentially distressed.
01:47So it's just it's going to be tough for him to get eBay shareholders on board with that.
01:52So the next procedural step is likely eBay board rejects the deal.
01:56And then does Ryan Coen want to go with a proxy fight?
02:00And that's when he's going to need to get eBay shareholders on board.
02:04And who knows?
02:06So never say never.
02:07But he's got a lot of people to convince that spring break in Miami sounds nice.
02:11He's got a lot of people to convince that spring break in Miami sounds nice.
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