Jim Cramer has launched a scathing critique of GameStop's unsolicited $56 billion bid for eBay, questioning the motives behind the aggressive move and likening it to the corporate raiding tactics of the 1980s. GameStop (NYSE: GME) CEO Ryan Cohen made the offer over the weekend, proposing to acquire eBay at $125 per share — a 20% premium to eBay's Friday close of $104.07.
GameStop stock dropped approximately 8.5% on Monday to around $24.33, while eBay shares climbed roughly 6% to just over $110. The market's tepid response to the offer is evident in eBay's stock trading well below the proposed $125 price, indicating widespread skepticism about the deal's completion.
Cramer compared Cohen's tactics to the 1984 campaign led by T. Boone Pickens, where Mesa Petroleum launched a bid for the much larger Phillips Petroleum — a textbook example of corporate 'greenmailing.' The CNBC host suggested the bid might be intended to force a lucrative buyout rather than a genuine acquisition.
The former hedge fund manager took particular aim at GameStop's narrative that eBay is a failing entity, arguing that eBay has actually undergone a 'fabulous' turnaround. He dismissed Cohen's public criticisms as an 'insult dog story' that 'wears thin' when contrasted with eBay's operational improvements.
Baird analyst Colin Sebastian echoed the skepticism, assigning the deal a 'relatively low probability of success.' He noted that while the transaction 'screens as accretive' on paper, the gains are 'driven by financial engineering rather than operating synergies.' Sebastian also raised the possibility of a 'poison pill' defense from eBay's board.
The offer is split evenly between cash and GameStop stock, which would require GameStop to issue over one billion new shares and take on up to $20 billion in new debt. GameStop's current market cap sits just under $12 billion, compared to eBay's $46 billion, making the acquisition attempt a massive 'David and Goliath' proposition.
Cohen has indicated he is prepared to take the offer directly to eBay shareholders if the board rejects it. eBay confirmed receipt of the proposal and said its board would review it.
