A week ago, Grapevine-based video game retailer GameStop made a surprise $55.5 billion offer to acquire eBay, the online auction marketplace giant. At the time, many cast doubt about the bid could be financed, with the Wall Street Journal calling it “the equivalent of a smelt swallowing a whale.” Now eBay has issued a response—and it’s a decided no.
“We have concluded that your proposal is neither credible nor attractive,” eBay Board Chairman Paul S. Pressler wrote in a letter to GameStop CEO Ryan Cohen, the billionaire co-founder of Chewy.
Citing financing ‘uncertainty’ and ‘operational risks’
eBay said that in reaching its decision, it took five things into account: “1) eBay’s standalone prospects, 2) the uncertainty regarding your financing proposal, 3) the impact of your proposal on eBay’s long-term growth and profitability, 4) the leverage, operational risks, and leadership structure of a combined entity, 5) the resulting implications of these factors on valuation, and 6) GameStop’s governance and executive incentives.”
Pressler’s letter called eBay “a strong, resilient business that has delivered meaningful results over the past several years.”
“We have sharpened our strategic focus, strengthened execution, enhanced our marketplace and seller experience, and consistently returned capital to shareholders,” Pressler added. “With its differentiated global marketplace and a clear strategy, eBay’s board is confident that the company, under its current management team, is well-positioned to continue to drive sustainable growth, execute with discipline, and deliver long-term value for our shareholders.”
“Our team remains focused on executing our strategy and driving our business forward in the best interests of the company, our shareholders, our employees, and millions of buyers and sellers around the world,” the letter summed up.
Substantial ‘funding gap’ remained
According to CNBC, GameStop had gotten a $20 billion financing commitment from TD Securities to back the proposal, with GameStop having around $9 billion in cash on hand. But that left a “substantial” funding gap in place.
As of this writing, GameStop hasn’t officially responded to eBay’s response.
Don’t miss what’s next. Subscribe to Dallas Innovates.
Track Dallas-Fort Worth’s business and innovation landscape with our curated news in your inbox Tuesday-Thursday.
R E A D N E X T
-
You'll find deadlines coming up for a new accelerator program; and many more opportunities.
-
In a surprise move, Grapevine-based GameStop offered $55.5 billion in cash and stock for the online auction marketplace. A Wall Street Journal editorial called the proposal "the equivalent of a smelt swallowing a whale," given that GameStop has a market cap of $11 billion and it's trying to chomp up the much larger eBay, whose market cap is $46 billion.
-
The Texas Innovation Operating System is tapping into what the partners call "a growing alignment across Texas for a broader innovation community." The connected system aims to be a first step in what the partners describe as "the G20 of Texas Cities in Innovation"—promoting regional innovation as well as connecting into the broader statewide network.
-
The premium flexible workspace brand aims to bring founders, executives, and high-growth teams into a shared professional community.
-
Texas Instruments invented the world's first handheld electronic calculator prototype in 1967. This week, it launched a new graphing calculator "built to meet the demands of today's math classroom" and to grow with students from middle school algebra all the way through college and future STEM careers.
-
Raytheon's next-gen SharpSight radar systems are built within Raytheon's McKinney Consolidated Manufacturing Center. The radar enables critical missions including "anti-surface warfare, border protection, coastal monitoring, search and rescue, and long-range surveillance," Raytheon said.
-
Designer Jonathan Adler is bringing his iconic style to Micheals in a new collection, starting April 17. Everyone from 'mid-century mavens' to West Coast bohemians" can find the designer's signature flair to spark their own creativity, Michaels said.
-
Dallas Innovates and our partners at the Dallas Regional Chamber spotlight the names you need to know in Dallas-Fort Worth's AI economy.
-
Just last month, Public Storage announced it was relocating from Glendale, California to Frisco. Now it's unveiled its mega-acquisition of Colorado-based National Storage Affiliates—whose portfolio includes more than 1,000 properties, 69 million rentable square feet, and 550,000 units across 37 states and Puerto Rico.
-
HKS made the top 50 from Dallas, while North Texas companies from Coppell to Frisco showed up across architecture, AI, healthcare, restaurants, media, and travel. Statewide, Austin led the way, with Houston, Midland, San Antonio, and others also earning spots.
