GameStop CEO Ryan Cohen is so determined to buy eBay that he’s taken his own $35 billion pay deal off the table.
Cohen has withdrawn the proposed compensation package because he wants to fully focus on revitalizing GameStop’s business and acquiring eBay, GameStop said in a press release on Tuesday.
Cohen has reiterated his intention to acquire the online marketplace in recent days, despite the target being more than five times larger than GameStop, with a market value of $48 billion, and eBay rejecting Cohen’s cash-and-stock offer in May.
Chewy’s billionaire cofounder explained his interest in the tie-up during an episode of the “All-In” podcast released on Tuesday.
He highlighted the opportunity to cut eBay’s bloated costs; to make it a big player in live commerce by using GameStop’s roughly 1,600 US stores to fulfill orders and serve as studios for content creators; and to expand into digital collectibles by creating a marketplace for digital items in video games.
Cohen also said he’ll put $500 million of his own money into the deal to demonstrate his conviction.
“When you look at how much the businesses together make sense, and then you look at the fact that it’s within my circle of competence, I can’t stop thinking about it,” Cohen said.
In a June 19 interview with Piers Morgan, Cohen declined to rule out a hostile takeover, meaning he might attempt to buy the business against the board’s wishes.
At Cohen’s request, GameStop has removed the proposed CEO Performance Award from its proxy statement, it said in Tuesday’s press release.
The video-game retailer’s shareholders were poised to vote on the pay package ahead of the company’s annual meeting on July 7.
Cohen stood to secure a total of 171.5 million share options if he grew GameStop’s market value to $100 billion, and its adjusted profits to $10 billion. Those shares would be worth in excess of $35 billion
He’s faced backlash over his proposed pay package. Michael Burry of “The Big Short” fame revealed in early May that he’d sold his GameStop stake because he was skeptical of the eBay deal, and suggested Cohen was pursuing the heavily dilutive transaction because it would help him hit his market cap and profit milestones, generating a huge payout for him.
GameStop noted in a filing that Cohen wouldn’t have received a windfall purely for acquiring eBay, as his performance hurdles stood to be adjusted to reflect a stock-based acquisition.
In its press release, GameStop said it would provide fresh details about its plans to purchase eBay this week, including its strategic rationale and how it plans to run the combined company.
GameStop and eBay did not immediately respond to requests for comment.
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