00:00One of the stories, Paul, that's got you and me scratching our heads is eBay.
00:05GameStop's bid for eBay, a company that is four times its size.
00:09Ryan Cohen, of course, making this very dramatic takeover offer for the company.
00:14eBay has now rejected that $56 billion takeover offer, calling it neither credible nor attractive.
00:19I think that pretty much tells you what it thinks.
00:21I did investment banking for a long time, and I can get very creative with capital structures,
00:25but I have a hard time seeing how they would finance this thing.
00:28All right, let's bring in Cecilia DeNastasio.
00:31She is our video game reporter here at Bloomberg.
00:33Great to see you, Cecilia.
00:35Thank you for having me.
00:36What was the thinking behind GameStop and making a bid for eBay?
00:41You know, we actually didn't get a lot of insight into what CEO Ryan Cohen thought that the proposed synergies
00:46could look like.
00:47He never really went out and said, hey, we run a video game retail company, but also we're doing really
00:54well in collectibles.
00:54We're doing really well selling Pokemon cards.
00:56eBay also doing really well selling Pokemon cards and baseball cards.
01:00We could have heard that in any of the interviews that Ryan Cohen gave, but he didn't actually really go
01:06out and say that.
01:07In fact, when he was given questions about what the combined company could look like, he often sort of dodged.
01:13So, I mean, what's the story with GameStop these days?
01:15I mean, I'm not a gamer.
01:18Thank goodness most of my kids are not gamers.
01:21But it's almost a meme stock.
01:23But what's the real call on this company these days?
01:25You know, it's interesting because GameStop could be doing a lot worse than it is doing.
01:31You know, they shuttered, you know, thousands of stores over the last couple of years.
01:36It used to be a ubiquitous presence at your neighborhood strip mall.
01:39And, you know, gamers are increasingly purchasing their wares in online marketplaces and not at these physical storefronts.
01:47But GameStop is still hanging on.
01:48CEO Ryan Cohen said, you know, we could be doing worse.
01:51It's not a great business, but it's hanging in there.
01:54We could be doing worse.
01:55There's not a great line that you want to hear from the CEO of a company's stock that you happen
01:59to own.
01:59So, having said all of this, there's been some reporting that perhaps Ryan Cohen just wanted to boost the stock
02:07price of GameStop because there's some clause, I guess, in one of his compensation packages that if the share price
02:12reaches a certain level, he gets another big payout.
02:15Can you talk us through what's going on there?
02:17It's really hard to say.
02:19If the companies did end up combining, then it's possible that he would have been able to receive that payout
02:24and he would have been very happy.
02:25But also at the same time, a lot of analysts pointed out that the way that Ryan Cohen approached eBay
02:31wasn't exactly so friendly.
02:35You know, it was an unsolicited bid.
02:38He didn't publicly state what he thought the synergies could look like.
02:42When eBay came back saying that the deal felt neither credible nor attractive, I think that kind of speaks to
02:49this idea that, you know, maybe this wasn't so thoroughly thought out.
02:54I think a lot of analysts are very, very confused about the tenor of this.
02:58Well, CNBC interview did a lot to improve that outlook there.
03:00Yeah.
03:01I mean, what a disaster that was.
03:02So, do you think GameStop would pursue a proxy fight and take it to that next step?
03:08It's possible.
03:09You know, Ryan is a very unpredictable executive, which is part of what makes him really fun to cover.
03:14He has, he posted a manifesto on X, formerly known as Twitter, describing how he thinks American business people are
03:22often taking a really risk-averse approach to running their companies.
03:25And he's really trying to carve out a model for something really different.
03:28So, it's possible he would pursue the proxy fight.
03:30It's possible also that this was a publicity stunt.
03:33Do we know who his advisors are?
03:35His investment banking advisors?
03:37The only thing I saw was he's got a financing letter from TD Securities, which again tells you that.
03:42Highly confident, right?
03:43Highly confident for $20 billion.
03:45I haven't seen that in 30 years.
03:46But we don't really know who his other advisors are.
03:49He's a highly autonomous individual.
03:51I like the way you put that.
03:53That was a great answer.
03:55It might even be a dodge in the same way that Ryan Cohen may not have answered some questions head
03:59on.
04:01But, yeah, telling.
04:02Yeah, so we'll see.
04:03But that was certainly, I don't think anybody had that on their bingo card.
04:06No, no, no, no.
04:07When that headline crossed, and I believe it was over a weekend, I remember looking at it thinking, what?
04:12How is this going to work?
04:13Yeah.
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