As reports The Wall Steet Journal, in a letter to GameStop CEO Ryan Cohen, eBay Chairman Paul Pressler indicated that the company didn’t see enough clarity on the financing of the deal and the risks associated with the business combination.
Cohen said earlier that GameStop was willing to buy eBay for $125 per share – in cash and its own securities. According to him, the combined company could become a major competitor to Amazon.
However, Wall Street analysts were skeptical of the initiative. As CNBC notes, the market value of eBay is now much higher than the capitalization of GameStop – about $48 billion against $10.3 billion. Experts also doubt that there is sufficient business synergy between the companies.
According to WSJ, after the news appeared, eBay shares fell by about 1%, and GameStop securities lost about 4%.
Cohen claimed that GameStop received a letter of guarantee from TD Bank for a loan of up to $20 billion and hoped to attract additional investors, including sovereign wealth funds from the Middle East. However, the company did not disclose the details of the financing of the deal.
