00:00GameStop just made a $56 billion offer to buy eBay.
00:04But GameStop is only worth about $12 billion.
00:07How is that possible?
00:08Well, here's what's happening.
00:10Ryan Cohen, the CEO of GameStop,
00:12announced Sunday that his company wants to buy eBay outright
00:15and use their combined powers to combat Amazon.
00:18eBay's board hasn't agreed to anything.
00:21This is GameStop basically saying,
00:22we want to buy you whether you like it or not.
00:24The problem?
00:25GameStop only has about $9 billion in the bank.
00:28They have a promise of $20 billion more,
00:30but the deal costs $56 billion.
00:32That leaves a $27 billion hole,
00:34and Cohen's answer on how to fill it
00:36is to print more GameStop stock and use that as currency.
00:39Cohen went on CNBC the next morning to explain it.
00:43It's half cash, half stock.
00:45I hear you.
00:47I'm just saying that that math doesn't get you to the price that you're offering.
00:54Where's the rest of the money coming from?
00:57Andrew laid it out pretty clearly.
00:59I don't understand your question.
01:01We're offering half cash, half stock,
01:03and we have the ability to issue stock in order to get the deal done.
01:07Now, this isn't just some weird business story.
01:09Both GameStop and eBay spent the last decade getting lapped by Amazon.
01:13Cohen argues GameStop's 1600 physical stores could give something Amazon doesn't have.
01:18Real location selling, authenticating, and shipping secondhand goods.
01:22Analysts say the idea is coherent, but not the math behind paying for it.
01:27Critics on Wall Street say the deal doesn't add up,
01:29and that Cohen's non-answer on live television made things a lot worse,
01:33resulting in its stock dropping 10%.
01:36But his supporters say this is exactly who Cohen always has been.
01:40After all, he was the one who took GameStop from losing $381 million a year to making $418 million.
01:47So the big question, is this GameStop's comeback moment or the beginning of the end?
01:52Drop your take in the comments and follow us here for more.
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