GameStop NYSE:GME disclosed it owns 43.4 million eBay NASDAQ:EBAY shares, or 9.8% of the e-commerce company, a sharp step up from the roughly 5% economic stake it held in early May when GameStop CEO Ryan Cohen offered to buy the company for roughly $56 billion. GameStop shares were unchanged premarket.
The videogame retailer converted that exposure into common stock over recent weeks, buying 3.5 million shares for about $381 million last month and settling 39 million shares from put/call pairs on Friday. In an interview with Bloomberg Television, Cohen said again, "we're coming for eBay one way or another," and declined to say whether he would raise his offer, telling Bloomberg he wouldn't negotiate against himself.
Cohen proposed buying eBay, a company roughly five times GameStop's size, arguing the combination would compete more directly with Amazon (AMZN). eBay's board rejected the cash-and-stock offer as neither credible nor attractive. The financing remains the key question. It leans on a non-binding commitment letter from TD Securities for up to $20 billion in debt, contingent on the combined company earning an investment-grade rating. GameStop shareholders approved a larger authorized share count last month, and Cohen has committed $500 million of his own money.