An interview on CNBC turned awkward Monday when GameStop CEO Ryan Cohen could not answer a basic question about his company’s attempted acquisition of eBay.
GameStop offered to buy eBay for $55.5 billion, with Cohen offering $125 per share for eBay in cash and stock. Cohen refused to give a direct answer to CNBC’s Andrew Ross Sorkin as he repeatedly asked on “Squawk Box” how GameStop could afford to purchase eBay when the company’s market capitalization amounts to $11.31 billion.
“I think we can start with the idea that the market cap of GameStop, let’s call it $11 billon, you have $9 billion on your balance sheet. Arguably if you’re providing effectively all of your stock and then cashed it, it gets you to $20 [billion]. You have this letter from TD [Securities], that’s another $20 [billion]. We’re now at $40 [billion]. We’re still off by, call it $16. And the $20, as far as I understand, while it’s considered a highly confident letter, meaning TD saying they’re highly confident that they’d provide the financing, it’s not locked financing,” Sorkin said.
“Well, we’ll see what happens,” Cohen replied.
“Um … I hear you. I understand that, I’m just trying to understand where the rest of the money would come from,” Sorkin said.
“It’s half cash, half stock,” Cohen said.
WATCH:
Sorkin and co-host Becky Quick told Cohen that his plan appeared unattainable. Cohen continued repeating his answer and saying the details are on GameStop’s website.
“Ryan, that’s a pretty straightforward question, I don’t get it,” Quick said. “Like, where’s the rest of the money coming from? Andrew laid it out pretty clearly.”
“I don’t understand your question,” Cohen said.
Cohen told eBay’s chairman of the board in a letter that TD Securities committed to providing $20 billion to help GameStop fund the deal, though this assistance does not give GameStop the needed $56 billion to purchase the company. eBay said Monday it will “carefully review and consider the unsolicited proposal.”
Cohen is reportedly prepared to launch a hostile bid if eBay rejects the proposal, according to The Wall Street Journal.
While GameStop’s market capitalization is less than $12 billion, eBay is valued at around $49 billion.
All content created by the Daily Caller News Foundation, an independent and nonpartisan newswire service, is available without charge to any legitimate news publisher that can provide a large audience. All republished articles must include our logo, our reporter’s byline and their DCNF affiliation. For any questions about our guidelines or partnering with us, please contact [email protected].
