- GameStop shares fell 12% after the company privately exchanged $1.4 billion of convertible senior notes for stock, increasing the share count and diluting existing holders.
- CEO Ryan Cohen is weighing withdrawing GameStop's $56 billion bid for eBay, instead pursuing a joint venture or partnership that would let eBay use GameStop's roughly 1,600 U.S. locations for trading cards and collectibles.
- Cohen bought 700,000 GameStop shares at an average price of $24.41 on Oct. 2 and 450,000 shares at about $24.33 on Sept. 29, bringing his direct holdings to 41,648,522 shares.
- GameStop's Q2 revenue fell 18.7% to $790.2 million, but operating income rose to $160.2 million from $66.4 million a year earlier and gross margin expanded to 43.7% from 29.1% on higher-margin collectibles.
- eBay's board rejected GameStop's May offer of $125 per share in cash and stock, citing uncertainty over financing, operational risks, and added debt.
Quotes
“We are offering half cash, half stock, and we have the ability to issue stock in order to get the deal done”
“the uncertainty regarding your financing proposal”
Sources
- GME CEO Ryan Cohen May Reportedly Withdraw GameStop’s $56B eBay Bid — Here’s What He’s Considering Instead
- GameStop Stock Climbs as Ryan Cohen Buys $28 Million in Shares, Extending Rally to Five Straight Weeks
- GameStop (GME) stock crashes 12% on $1.4 billion convertible senior notes private exchange for stock - GameSeek.com