The overwhelming response to the news that video game retailer GameStop intends to buy e-commerce website eBay has been a resounding “huh??” GameStop has billions of dollars in cash reserves, sure. It’s true that a potential acquisition of eBay makes sense for GameStop, given its shift toward Pokémon cards and collectibles. Yet it doesn’t take a genius to see that eBay is already a much bigger company than GameStop. So what’s going on here?
As far as GameStop CEO Ryan Cohen is concerned, though, the situation is straightforward — so straightforward that, in a recent interview with CNBC, the meme stock king seemed outright annoyed to be answering any questions about the deal. The interview seems fine at first. Around two minutes in, when the CNBC host started asking follow-up questions, Cohen’s media training seemed to turn off.
“Invariably … a lot of people are going to ask, how does the math, math, for you?” host Andrew Ross Sorkin says. “Given the price tag, 56 billion dollars, given the market cap of GameStop, which is a fraction of that.” The host goes acknowledges that GameStop has a $20 billion financing letter from a bank, but that even with GameStop’s existing cash reserves, the company would still be far off from affording eBay.
It’s a valid question. Cohen rolls his eyes and answers, “It’s on our website. It’s half cash, half stock. But the details are on our website.” Sorkin encourages Cohen to go into detail, because the point of the interview is to inform people of what’s going on — not to tell them to go elsewhere.
“We’ll see what happens,” Cohen responds. The host seems astounded, and tries defusing the situation with some laughs. The TV personality pushes again, intent on getting a satisfying answer. Cohen repeats that it’s half cash, half stock with an air of annoyance. He never addresses that the known figures are considerably smaller than what GameStop claims it will offer.
Then CNBC’s Becky Quick steps in and says her co-host’s question shouldn’t be confusing to the CEO. Cohen just says that he doesn’t understand the question of where the money will come from and once again redirects people to a website.
Nearly all the YouTube comments express disbelief at the tenor and progression of the interview.
“What’s the purpose of agreeing to an interview if you don’t want to actually talk?” one viewer writes.
“What a trainwreck,” another writes.
The real answer, which he can’t really say, is that money is not real. There’s a chance that the mere news of this acquisition will boost GameStop’s stock warriors, who wholeheartedly believe the company will achieve great things. Much like Elon Musk purchasing Twitter, it’s also plausible that GameStop might take on loans that will go on the eBay balance sheet. Further underlining the absurdity of all this, if Cohen is successful in his eBay bid, it’s likely he will meet the requirements for his $35 billion stock option payday.
Whatever the strategy will be, Cohen doesn’t see why he must explain it.
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