GameStop takes nearly 10% stake in eBay

Videogame retailer GameStop owns nearly 10% of e-commerce company eBay, the company said in ‌a regulatory filing late on Friday, signaling its intent to push ahead with plans to buy eBay even after its unsolicited offer was rejected.

GameStop said it owns 43.4 million outstanding shares of eBay or 9.8%, marking a dramatic increase ​in ownership from early May when GameStop CEO Ryan Cohen told eBay's board chairman it wanted to ​buy the company for roughly $56 billion.

At that time he said GameStop had "accumulated a ⁠5% economic stake" through derivatives and beneficial ownership.
Over the last weeks GameStop turned its economic stake into ​common shares. Last month it bought 3.5 million eBay shares for roughly $381 million and on Friday it settled 39 million ​eBay shares from put/call pairs, the filing said.

An eBay representative was not immediately available for comment.

In a second filing also made on Friday, Cohen said "I’m not going to call my shots, but we’re coming for eBay one way or another." That ​filing transcribed his interview with Bloomberg Television on Thursday.

Two months ago when Cohen first proposed buying the ​company roughly five times the size of his own, the billionaire investor argued a tie-up between GameStop and eBay, a ‌company ⁠that he would run, would be a bigger competitor to Amazon

EBay in May rejected Cohen's cash and stock offer, calling it "neither credible nor attractive."

Since then Cohen has said in numerous interviews that he will press ahead with his plans. GameStop shareholders last month approved increasing the company's authorized share count which gives GameStop ​more flexibility to maneuver. ​Cohen is also putting $500 ⁠million of his own money into the transaction.

Wall Street has repeatedly questioned Cohen's planned financing because it relies heavily on a non-binding commitment letter from TD ​Securities for up to $20 billion in debt, which is contingent on the combined ​company achieving ⁠an investment-grade credit rating.

In the Bloomberg interview Cohen said "there has been a complete failure by the media to explain why this transaction makes sense" and added GameStop has a "highly confident" letter from its bankers and "we have a lot ⁠of ​parties that are interested in this transaction."

Cohen was also asked ​by Bloomberg whether he would be ready to raise his offer to buy eBay. "I’m not going to negotiate against myself," he said.

-Reuters