GameStop's CEO Ryan Cohen made it clear this week that his company is serious about buying eBay. He just will not say how much he is willing to pay.
In a recent interview, when asked if he might increase the value of his $56 billion proposal for eBay - which the company turned down earlier this year - Cohen declined to answer. When asked if he would raise the bid, he gave a blunt answer: "I'm not going to negotiate against myself."
The logic behind the deal is simple to him. GameStop's collectables business makes up about 42% of revenue. eBay operates one of the most expansive online marketplaces globally. Cohen envisions the merged company reaching a $1 trillion valuation, underlining significant overlap in their collectibles operations.
eBay, through a spokesperson, declined to comment on Cohen's comments.
Cohen pointed to something that might seem odd for an online-focused deal: GameStop's actual brick-and-mortar locations.
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The company has roughly 1,600 stores across the United States. According to Cohen, these physical stores can act as centers for verifying trading cards - like those for Pokémon or sports - a fast-expanding market where eBay has been active for years. That is a big selling point because of the constant headache of fake or altered cards in the online collectibles market.
Here is the part that gets interesting. Cohen said about 80% of the population lives within a 15-minute drive of a GameStop store. That speed and trust factor could give the combined company an edge over rivals.
Cohen stated he intends to leverage eBay's infrastructure to create an online marketplace for video game items, a revenue model gaining traction across the industry.
The biggest question mark is how GameStop would actually pay for a deal this size.
A $56 billion purchase would be enormous for a company that, while profitable, does not have that kind of cash sitting around. A number of investors have voiced worries regarding the level of debt GameStop would need to assume to finance the acquisition. Cohen said he has seen interest from lots of investors who want to back the deal, and he expects the combined company to have an investment-grade credit rating - "The pro forma company is going to be investment grade," he said.
GameStop's shareholders recently approved a substantial increase in the company's authorized share count, a step taken in anticipation of the eBay acquisition.
Cohen mentioned that he might bring the proposal before shareholders without going through the board first.
For now, this deal is far from done. eBay has already said no once, and Cohen has not shown his next move. The back-and-forth could drag on for months.
If you own GameStop stock, the equation comes down to risk versus reward. The collectibles market is real and growing, and tying it to eBay's massive user base could unlock a lot of value. But a deal this large carries real risk - even with investor interest, financing a $56 billion purchase is not simple. Debt loads can change the math fast if interest rates stay where they are.
If you own eBay stock, this is a takeover story you get to watch play out. Rejected bids sometimes turn into higher bids. Cohen's public threat to go to shareholders puts pressure on eBay's board to either negotiate or convince investors the company is worth more on its own.
It's a bet worth watching, even if the final price tag is still a mystery.
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