Ryan Cohen LIVE: GameStop's $56B bid for eBay is half cash, half stock — and he wants to run it like a startup

to appear soon. You guys look fantastic. Fantastic. We'll have you both back on soon.

Talk to you soon. John Jordy, congratulations, guys. You take care.

Goodbye, guys. Cheers.

Bye.

Just yesterday, Ryan Cohen, uh, of GameStop offered a $55 billion unsolicited bid for eBay, targeting two billion in cost cuts. and we have him joining the show with us now. Ryan Cohen, welcome to the show. Thank you so much for taking the time. How are you doing?

How are you guys? Great to see you.

Fantastically. Uh I would love an update. What can you share with us on the situation as things have developed since yesterday? Just to sort of uh set the obviously this is moving very quickly. Where are we right now? What's happening?

Uh we made an offer yesterday. Mhm.

Um 125 bucks a shareh

um and

half cash, half stock.

That was funny, wasn't it?

Have you considered 49% cash? Hey, why did you get to half cash, half stock? Can you unpack that a little bit at least? Well, I mean, frankly, when you think about me going and running the eBay business,

what we're proposing is for existing shareholders to take uh half of their investment off the table. And that would be us providing them with 28 uh with 28 billion, which is like a 40% premium from when we started buying the stock. uh and then they would be getting roughly uh I mean it depends on ultimately when the transaction closes but they would be rolling the rest into the combined company of GameStop and eBay. Mhm.

Frankly, with me running eBay, I think that the company, the earnings power of the company is going to increase substantially.

Uh, as well as the ability to to grow. The platform stagnated over the last decade and, uh, I could do a lot with eBay.

I love it.

That's a very strong business and that's right up my alley.

Take us through the big vision. like in 5 years you're at the helm like how big can this business be? Are you expanding it? Obviously there's an operational efficiency point but what is the big picture? What's the blue sky pie in the sky vision for the combined entity?

So where we've had success at GameStop and where eBay has had success is in collectibles trading cards uh collectibles. the founder of your show was uh was talking about his M blanc and like that's a good example that's uh a perfect item to go and buy on eBay, but you're always concerned uh that is it going to be real and the trust and that's something that using GameStop 1600 stores we can immediately authenticate that item the seller can ship it or we can ship it but we've got 1,600 access points that we can do live authentication. So we can go deep in collectibles leveraging our physical infrastructure. We can increase uh intake by bringing a lot more product onto the platform. And then there's a lot of other categories that I can I can grow in. And uh you know you look at live commerce as an example. I mean, eBay has 130 million users and they're getting crushed by competitors in live commerce. So, uh, an owner's mentality, you know, I can, uh, I want to I want to own eBay forever. Like, I I love that business. It's run like a public utility. It should have been wiped out, but it hasn't been.

It's been remarkably resilient. How many how many companies how many startups have gone after a specific category on eBay raised a hundred million plus dollars and yet eBay has remained resilient. It's so it shows that

that there's um you know it's it's a it's a really powerful platform.

Yeah.

That's why I love it. And you know the website still looks the same as it did in 1995 but everyone's tried to kill this thing. Yep.

And it's still making over $2 billion a year.

So that goes to show you the the durability of the business.

Talk about live commerce more. Would that be just a better integration with Tik Tok, Instagram streaming, Twitch streaming? Do you need to go and partner with big creators? Do you need to find your own platform for that? Like how does that actually play out in a world where uh eBay and you are making a bigger push into live commerce? It makes a lot of sense, but I'm wondering like how does it actually work?

Yeah, it would it would be partnering with creators. I mean, they've got the platform. We would improve the platform so it looks better and more consistent with the kind of UI that you have at at competitors, but there's the user base and so it's not something you have to market. It's building out better tech and partnering with creators.

Yeah. and and the correct incentive structure for those creators because I bet you right now you could probably go get some referral code or something, but it's not deeply integrated in a way that you can really accelerate on a social platform. Uh

why do you think eBay has eBay been been a target of any type of um deal like this in the past? I'm I'm not familiar with any off the top of my head, but why do you think maybe it hasn't been more more of a target? Uh, and and I guess like why why do you think you can get more efficiency out of it than maybe some other potential buyers who I'm sure see see their costs? You know, marketing is something that uh people gravitate towards. Um, but I'm sure you're seeing other efficiencies as well.

So, in terms of the competitive landscape on an acquisition, I think there was uh some people circling around a few years ago. Nothing happened. the strategics can't really do it because I don't think that they would be able to clear antirust.

So, uh any of the large competitors wouldn't be able to acquire it. Um and u you know I don't think that we would have any regulatory issues uh getting clearance on on a on a merger. Uh, in terms of the efficiencies, GameStop is a good example. Like GameStop is a dog and it could have been dead. And we breathe life, we we've breathed a lot of life into this thing,

right? And you you look at SGNA, we've pulled out, we've dropped SGNA by 47%, $800 million

by making marketing more efficient, almost turning off marketing. I mean, everyone knows GameStop, everybody knows eBay. So, you talk to the marketing people that tell you like it's going to tank revenues and all of this and the reality is uh most of that marketing spend isn't making money, but everyone's trying to protect their jobs and there's kickbacks. There's all kinds of perverse incentives. And so, I'm running the business like a family business. You know, it's it's really not that complicated. And you look at eBay spending 2.5 billion bucks to grow 1 million users, 2 billion in cost cuts between sales and marketing and corporate overhead. You it's not a lot. Uh and it's not something that's going to take a few years. Like it's something that is going to happen fast fast because putting leverage on this thing and I don't want to run a leverage business. So I'm not going to run it hot. I'm going to pay down the leverage and I'm going to increase earnings. Uh they're spending5 billion dollars on operating expenses on 11 billion business that has no inventory and it's asset light. So it just there's 11 a half thousand employees and it doesn't make sense.

It it doesn't you don't need a

I could run that business I could run that business from my house. Like it's it's eBay. It looks the same as it did in 1995. They need 11 and 12.

So, so is is the Elon Twitter take private somewhat of an inspiration here? There's been a number after that happened. In many ways, the business suffered, but maybe it wasn't because of the deep cuts that he did to to the team and

the service kept working.

Yeah, the service kept working. It's still a great product. Uh I we've been surprised that more CEOs and management teams haven't done something like that with businesses that are household names but somewhat stagnated. Uh is that an inspiration at all?

Yeah. And Twitter is a good example. I mean what really happened at Twitter was that the advertisers you I don't know what the situation is now but they pretty much conspired against him and you know it had nothing to do my understanding is it really had nothing to do with the cost cuts more of just the advertisers conspiring against him because of the demented political landscape and the fact that people apparently are against freedom of speech. And so like you look at the usability of the platform and the teams, the engineering teams are much smaller and they're innovating a lot faster. So it's actually the opposite. The more people you add, the more you slow things down and the fewer people you have, the more it's like a startup. You got to always be in startup mode and you build big teams and nothing gets done anymore. Uh, do you think LLMs will be a tailwind for eBay over the next decade? It feels like for the long tale of commerce, you're trying to find really specific items. It feels like LLMs and people doing research in these products could be uh catalyst for the business. Maybe there's things on eBay that would be tough to to find. But if I'm really getting precise around prompting or running these sort of uh agentic uh searches, uh maybe maybe I have a higher likelihood of purchasing something.

Yeah. I mean, I think about all of the things that can disrupt the business in the future. And uh, you know, I think that eBay is the kind of business where the the future of the business model is more certain than most tech businesses. And that's why it's done so well. And, you know, there's been such a lack of innovation, yet it hasn't been able to be disrupted. So, I would expect that uh to continue to to be the case.

If it doesn't materialize as an M&A, are you looking at a board seat? You have a position. Will you be more active in a non-MA scenario?

Yeah. I mean, I'm going to I'm going to do whatever we need to do to protect our investment and uh to improve the business, but the goal here isn't to be an activist. The goal is I want to own eBay. I want to run eBay. Like I want that to be my baby. I want to build something much larger. And cost cutting frankly is the way to make the business more efficient to pay down the debt and to innovate. But you when I think about what I can do with eBay in the future, like

look at Chewy. Yeah. You know the eBay is like Chewy on steroids. And so, um, there's so much more runway and it's global.

Yeah. I mean, it seems like a huge opportunity. How do you want to be comped?

Based on performance 100%.

Is there any tension between you and the shareholders? How do you actually create alignment there? It would be B my current compensation plan is tied to uh really lofty metrics and it's based on the the first trunch. I've got to double market cap as an example just to hit the first trunch and to 10x it in order for it to fully vest. So

I'm not interested in Yeah, I I haven't taken uh a dollar of salary or any bonuses. You know, it's funny actually. I just got a call from my team today that said this is how I know they hate me. They're not happy about this, by the way.

The GameStop. This is the GameStop team.

eBay. No, eBay is not

eBay team. Okay.

Yeah. After this interview, they're they're really not going to like me,

but cuz they're going to find out I'm cutting marketing spend. And the board already like me because I'm calling out all the board fees. But I get a call and they say, "There is a there's a they're calling out your personal assistant." I said, "What are you talking about?" And they said, "They went on your the GameStop's career page and they saw that there's a listing for the personal assistant and it's all kinds of personal stuff and that's basically a a CEO benefit and you know, it's basically not pro. You're using company resources." Personally,

me I pay for my personal assistant personally. I don't even pay for my the company doesn't pay for my personal assistant. So, they're already starting to get um their they're doing whatever they can uh they want to fight.

Have you has any major eBay shareholders reached out to you? Have you had you know what is the general sentiment? You know, how do you think what do you think it'll look like if you take this uh directly to the shareholders? I don't know. I mean, I would want to I want to own eBay at $125 a share. We're propos there's tax advantages to rolling it, but when I think about what eBay could be worth if I'm running this business, I believe it's a heck of a lot more than $125 a share. And so, uh I I would roll 100% of the of the equity, but you know, we'll we'll see. We'll uh we'll see what happens.

Yeah. Uh what do you think of Michael Bur's critiques? Uh a lot of people were, you know, talking about him exiting yesterday. He doesn't believe. Have you guys chatted?

I haven't chatted with Michael in a long time. I've seen he's more active than he says his investing philosophy. So, I I figured the, you know, his risk appetite um and you know, the leverage we're putting on just it it didn't make sense for him, but it seemed as though it was more of a a trade more so than than anything.

Yeah. Looking at the price action yesterday, is that reflective of sort of like a shakeout of non-believers and you feel like you have uh the right people around the table now? Um, when I think back to Chewy, every single day was a shake out of Yeah. So, um, I don't know, it's hard to to diagnose the shareholder base and I'm I'm focused on what I could build over a long period of time. And

yeah,

if I got my hands on eBay, I can build something worth a lot and much larger than it is. So,

was Paramount at all an inspiration?

Going to ask.

I've looked at it. Um, uh, you know, what they did is really interesting, too.

Just because smaller company buying a much larger company, but the deal still went through, the capital was was marshaled. Uh that was something that I think was unclear yesterday for some people was you know half cash half stock where is it coming from? How much of this is just an ongoing conversation and as you work through this process you'll engage with other you know pools of capital or financeers to to actually put together the final package. Do you have a date that you want this to like be done by? Um I mean we have the cash I mean we have the cash accounted for

today in terms of uh a highly confident letter from our bank for the 20 billion plus we've got 9 billion of cash. So

uh and the rest would be them rolling the equity into the combined company.

Sure.

Yeah. Yeah, I think that was the that was the the the rolling of the equity was the thing that if it had got into the viral clip from CNBC yesterday would have made a lot more sense. So, I'm glad we're I'm glad we're getting it in now.

Yep. Is is there uh I guess uh how much of uh your critique of eBay is specifically around the current management team?

They've done a decent job. It's look, it's anyone. When you've got perverse financial and they're they're not operating like owner just, you know, when

when you've got it it all on the line, you're going to do whatever it's going to take. 20our days, 7 days a week, you're not going to stop. And when

when equity is given out to you like Candy, I mean, it's it's it's all companies. So, you know, the directors uh board of directors make $4 million. It's like 350 to 450,000 per director. There's been no insider buying at the company. I mean, like it's not a surprise they're not going to light the money on fire. They're not going to light the world on fire,

but you've got a bunch of professionals in the board and a professional management.

Yeah.

So,

if this deal goes through, roughly what percentage of your personal net worth will be uh tied to it? Well, um I I haven't done the math, but if things go correctly, then it better be the majority, otherwise I'm wasting my time.

Yeah.

What was your first memory using eBay?

Were you a power seller back in the day?

It's a very good question.

I bought and sold DJ equipment on eBay back in like 2003. It was amazing. I don't remember my first transaction, but uh I'm gonna have to get back to you on that one.

Okay. uh with GameStop. Last time we talked, you were mentioning a little bit of expansion into uh digital goods, less physical material and and and and stuff like do you think that there's an opportunity for eBay to play in a digital marketplace or in a world where uh certain collectibles or certain uh goods become digital or or or the market shifts towards more uh digital goods and and would you like to see eBay expand into that? Yes. And yes. Uh in terms of a digital marketplace and they're already doing it to a certain extent. I mean like all kinds of Roblox digital items are bought and sold but

uh and I've actually bought them for my kids and there's so much fraud on the platform. Like we're buying stuff. It's not a real item. End up having to do a chargeback but then it ended up getting delivered so you can't do a chargeback. So like they've got the basics of it but it's not being done well. So like digital gaming totally that's a a huge opportunity to to dig into.

Um there's so much potential

on on uh digital stuff I guess. Um you're obviously interested in cutting costs. Are you optimistic that stable coins might be a path to reducing costs? It's a high volume transaction business, obviously a lot of credit card fees. Maybe there's a way around that with stable coins. We hear that from a lot of stable coin founders. Haven't heard it from as many operators. What do you think?

I don't have a point of view on that. Um I haven't looked into it. So,

I think the sellers would would probably be eating the the the cost, but but um potential option.

Yeah,

I don't know. Jordy,

uh do you have any sense of how eBay is using AI internally today? Have they have they spoken about it much? Do you do you believe they're getting very much leverage out of the models? Do you think there there could be quite a bit more? I've seen that they've made uh listings easier in terms of just generating product descriptions and stuff like that. So, I think they're kind of like doing the super easy stuff. Um, still there's a lot of friction to sell a product on eBay. Like, it's uh it just it's not easy. So, the benefit of our 1,600 stores is we have the ability to increase intake, but I would go through it and I would make it as simple as possible to have a real item for sale as a seller.

And there's a it's there's a lot of steps. It's just it's a pain in the ass. It's too difficult.

Yeah. 1,600 stores in the world where you combined eBay and GameStop. Do you expect that number to increase, decrease, stay the same? Uh, it's a good question. I mean, our footprint is a moving target. We have, this was part of what appealed to me originally when I went into GameStop was the leases were shortterm. So, they're like two to threeear leases. And as we see how the business performs, you know, we decide whether or not it makes sense to renew the store. So, I mean, it's it it's going to be dependent on utility of the stores. Like, if there's traffic and if profitability is increasing, we'll keep the stores open and if it's not the case, then we'll shrink the the store base.

Okay. Uh, couple other scenarios. In a world where an M&A doesn't happen, is there a business partnership to be done where verification of rare collectibles can happen at GameStop physical retail stores for a price and eBay is paying GameStop for that service? Is that something you've explored? Is that something that's at all likely to happen?

Well, that would So, yes. and it would basically take $0 in capex in order to something like that and it's a good idea. Um I hope that doesn't want that doesn't happen cuz I want to I want to run the entire thing but if it doesn't then there I mean there's there's a partnership option.

I reached out to eBay like I don't know maybe a year or two years ago to talk to them about partnering and they didn't engage seriously. like everyone that everyone's on vacation. Everyone's always on vacation. Like they're not available. They have assistance. I'll get back to you next week. And it's like, let's go. Let's get it done now. So then they never get back to you. Then you're following up. It's like

there's there's there's no sense of urgency.

Yeah.

At at that company, there's no sense of urgency, frankly, at at most companies. So it never gained any traction.

Okay. Uh Etsy is trading at 6 billion. Is that a target if the eBay plan doesn't come together?

No collectibles action there.

It was in the chat. I got to ask.

Um eBay is just such a natural fit for the the collectibles leveraging our store print footprint, but then also like my ability to cut costs and build something much larger at the company. So I don't know. every everything else is if it doesn't work out, we could find something else, but um I I like eBay. It brings me back to my roots.

Uh what's something that eBay is not doing today that you think they could expand into? Or is that even the right question? And do you think the core business is just so great and they're so dominant in in many of these categories that you just want to pour fuel on the fire?

Live commerce.

Yeah.

But to me to me that's an extension, right? Because they have a lot of inventory. It's just a new selling channel.

Yeah.

Yeah. But I mean in terms of doing that well accelerating revenue growth, um you know I I think that that is that's big. And so going much deeper into collectibles in luxury trading cards, there's there's a lot of runway there.

Do you have a position on international capital providers, a lot of these big deals, uh the you know, maybe they start at 50 at half cash, half stock, they wind up being more leaning cash. That's what we saw with the Paramount uh Warner Brothers deal. Uh, are you interested in talking to international sovereign wealth funds, that type of capital provider?

We're um we're looking at a a variety of uh of different options currently.

Mhm. Makes sense.

Uh,

mutual friend of the of the show and uh GameStop Mod Retro, they've been pretty aggressively pushing into this retro gaming category. How do you see that uh growing? Our team at the office recently got a got an old Xbox 360, fired it up. I can see retro gaming just getting more and more popular. But what's your view on the category right now and where do you think it's going?

Uh we are we've uh we have the the return rates are kind of high, but we're we're building out the retro business in our stores currently. So, that's uh that's a it's a it's it's still small, but it's a growing category for us.

Mhm. Uh what do you want to see the rest of this week? How do you how do you uh how do you see it playing out?

Uh I don't know. It's a good question.

Balls in their balls in their court

pretty much. Yeah.

Balls in their court.

Well, we'll let you get to it. I'm sure you have more questions. Thanks for jumping on. You're welcome to join anytime. Let's do it again as as the story progresses. But we're enjoying following along. And if anybody out there wants more information,

it's on the website.

Yeah, it's on the website.

Exactly.

If anybody asks you how he's paying for it, just tell them half cash, half stock. You got the beginning and the end of the interview. Thank you so much for coming on the show.

Great to see you, Ryan.

Have a great rest of the week. Good luck out there. Goodbye. Oh, what a fun interview. Uh,

it's on the website.

I like the thesis. I I keep coming back to I like the thesis. I was confused about the financing. I I feel like an idiot now. Uh, friend of mine who's a investment banker was like, "Yeah, like this could totally happen just the way he's describing and everyone who's sort of, you know, uh, you know, reposting the clips thinking that it's crazy." Uh, it actually makes a lot of sense and, uh, and it could happen if the shareholders decide to roll forward. Uh we'll see how it plays out. We'll see what happens. Obviously with Warner Brothers, there was like an incredible push back against uh any stock and it wound up being uh all cash at the end of the day, but that was the Netflix thing. The real question is, do we see a dark horse Netflix style bid for this eBay company? Do we see it? Think a lot of people just weren't thinking about eBay too much. And now that they see this business has been immune, not necessarily immune, but face an onslaught of competition, vertical competition in every single category from watches to collectibles

uh to sneakers to fashion over and over and over. So much venture funding has gone into attacking uh their business and yet they have remained remarkably durable. It is very immune to AI, especially collectibles, right? uh no amount of AIEL abundance can generate more rookie cards from you know 20 30 years ago. So seems like a great business. I think Ryan has a strong vision. I would not be surprised for some other players to also get excited about the opportunity now that he has uh so uh uh pretty eloquently explained it to the world in in his own words. And thank you

to the chat for hanging out. you guys, uh, the GameStop crew, you guys really are a family. Uh, we've had, we've had thousands of guests on the show, and no one shows up.

No one shows up shows up like you guys.

They're the real deal. And they were asking us about some jargon that I didn't understand. I'm sorry if we didn't get to your questions. We tried to get the ones that sort of fit into this story. Uh, I don't have the full context on everything that's happened in the GME ecosystem. So, uh, good.

We'll work on uh, back on.

We'll get him back on. We'll talk more

as there's more news.

Um, he did have an interesting point that he says that he doesn't think any of the larger e-commerce players can make a bid because of antitrust considerations. I think he's thinking about Amazon, maybe Shopify. I don't know who else would be in that category of potential buyer, but then uh regulatory FTC I don't want to dip my toe in. Um, but when I think about

Shopify is an interesting one. Yeah, Shopify.

eBay really is a platform, right? It's another

It makes any sense together.

I'm not sure that it does either, but you can imagine they would be able to, you know,

we got to get Harley put the screws to them.

I was just thinking more like these scaled PE funds that

Oh, yeah. Yeah. Well, that's not a regulatory issue.

No, no, I know. That's But I'm saying that's a potential dark horse.

Totally. Totally.

Specifically because like they don't they're kind of paralyzed, right? They're they're worried about investing in in SAS. sitting on a bunch of

SAS companies that they can't exit for reasons we all know.

Yeah. And this one might be more durable. Um I'm just thinking about uh the the Amazon like would you like who is the Netflix of this story? If he's the Paramount and eBay is the Warner Brothers. It's the it's the the10 billion company going after the 50 billion hundred billion dollar company. Uh who's the Netflix in that story? It feels like it would be Amazon but Amazon's so dominant in e-commerce. Maybe a Shopify but The thing I kept coming back to is like we've always said it has been shocking that the that the the Elon Twitter playbook

hasn't been applied to more companies. Again, the Twitter acquisition has not

didn't go well, right? But that was because the reason that Ryan talked about which was the advertisers failing. So if if if um you know ad spend on the platform creators, but you have these companies that have real network effects like Twitter, like eBay, I do think you can cut pretty dramatically and um and still have a have a thriving um platform. At least you know my experience on

Ax, we went through a period where stuff was pretty buggy, but I think they figured it out. Yeah.

Yeah. It's funny uh talking to him. I I I get the GME army's uh love. Like I I I get the thesis, the way he thinks about things, the way he talks about things. Uh obviously tons of ups and downs in the journey, but uh like like the the the the basic thesis of the combination.

Yeah. The other thing's the other thing I'm excited about there's so much there's so much stuff in my house that would sell on eBay. I just I just never find the time to go out. I don't want to deal with photographing it. If I could just take a car full of stuff, take it to eBay, they can say, "Yeah,

I will take this. We'll donate this stuff."

I would happily do that. And I think that the Yeah, the integration with their existing retail footprint is interesting. I don't think they probably need

1,400 stores.