GameStop’s Wild eBay Bid Has Market Saying: “Show Me the Money” – Merger Arbitrage Mondays

eBay Inc. (EBAY): $107.69

Market Cap: $47.81 B

Deal Value: $55.5 B

It isn’t Cuba Gooding Jr. convincing Tom Cruise to scream, “Show me the money!” in Jerry Maguire. This time, investors want GameStop (GME) to do exactly that after the company proposed to buy eBay for $55.5 billion, offering $125 per share in a half-cash, half-stock deal. GameStop’s CEO Ryan Cohen said he was prepared to take the bid directly to shareholders if eBay’s board proved unreceptive.

GameStop, once a struggling mall retailer, rose to fame during the meme-stock craze five years ago. But eBay is worth nearly four times more than GameStop, making the takeover bid a highly ambitious move. GameStop has already acquired a 5% ownership stake in eBay through a small number of shares and mostly options.

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