GameStop’s Shares Drop Over 10% After $55.5B eBay Acquisition Bid
Michael Burry exited his GameStop stake after CEO Ryan Cohen unveiled a $55.5 billion bid for eBay financed with $9.4 billion cash and up to $20 billion in debt. Shares fell over 10% as investors raised concerns about funding a leveraged takeover that contradicts a debt-light growth thesis.
1. GameStop Proposes $55.5 Billion eBay Acquisition
The video game retailer submitted a non-binding offer to acquire eBay for $125 per share, valuing the e-commerce platform at approximately $55.5 billion. The proposal includes half cash and half stock, implying a 20% premium to eBay’s recent closing price.
2. Funding Plan Sparks Investor Concerns
GameStop plans to use $9.4 billion in cash on hand, secure up to $20 billion in debt financing from TD Securities and issue new shares to cover the remaining gap. Investor unease surfaced when CEO Ryan Cohen declined to detail how the company would bridge the $16 billion shortfall, prompting a more than 10% share decline.
3. Michael Burry Exits Position
Prominent investor Michael Burry liquidated his entire stake in GameStop after the leveraged bid was revealed, stating that the massive debt requirement conflicts with his original thesis of the retailer operating as a disciplined, debt-light compounder.