GameStop Corp. (NYSE: GME) CEO Ryan Cohen is making his clearest case yet for why he wants eBay Inc. (NASDAQ: EBAY), framing the proposed deal as a chance to transform one of the largest e-commerce platforms in the U.S. under an owner-operator model.Cohen joined Anthony Pompliano on the "From the Desk of Anthony Pompliano" podcast and explained why he wants to acquire eBay.
"I Want to Own eBay"
GameStop has proposed acquiring eBay for $125 per share in a half-cash, half-stock deal, with Cohen saying GameStop has about $9 billion in cash and a $20 billion financing commitment from bankers.
He framed the bid as a shareholder-friendly combination that would let eBay investors take part cash while rolling the rest into a combined company led by him.
"It's within my circle of competence," Cohen said. "It's a business that I understand. It's the second-largest e-commerce asset in the United States."
Cohen argued eBay is "under earning" and said he could "make a really big impact in terms of the profitability in the short term, but more important in the long term."
"It's something where I want to run eBay. I want to own eBay. I want eBay to be a much, much larger business," Cohen said.
He said his Chewy experience is central to the thesis.
"E-commerce is in my wheelhouse and there's no asset in my view that has as much potential as eBay," Cohen said.
Cohen is Undeterred
eBay rejected GameStop's proposal, calling the offer "not credible or attractive."
Cohen argued the response was expected, saying the deal is "not attractive to the board and the management team" because they would be replaced, but "it's very attractive to shareholders."
He contrasted his approach with eBay's current leadership, saying, "I don't get paid unless I build a much larger business and I want to turn eBay into something much larger."
He also took aim at eBay's expense structure.
"I mean, it's a business that's spending over $5.5 billion on $11 billion in revenue to run a business that essentially has no inventory and is very asset light," Cohen said, adding that he is "committed to $2 billion in cost cuts at eBay."
He Likes the Business
Cohen told Pompliano that he is prepared to keep pressing the matter directly with shareholders.
"We're going to do whatever we obviously need to do in order to bring this proposal in front of the true owners of the business," he said.
Cohen summed up his eBay motivations simply: "I want the business. I want the business."
GME Price Action
GME Price Action: GameStop stock was down 0.22% at $22.34 at the time of publication on Wednesday, according to Benzinga Pro.
Over the past month, GME has declined about 4.53% versus a 9.5% rise in the S&P 500 and is up roughly 10% year-to-date compared to the index's 8.2% gain.