CNBC anchor Andrew Ross Sorkin spoke to GameStop Chief Executive Ryan Cohen on Monday morning, following information that Cohen launched a shock bid to purchase eBay for some $56 billion.
Cohen told The Wall Street Journal on Sunday he’s providing 20% above eBay’s present share worth of $125 to purchase the web retailer, in hopes of making a web-based commerce large he believes can rival Amazon.
Ross Sorkin pressed Cohen on the financing, nevertheless, noting that GameStop’s market cap is nowhere close to the eye-popping determine he’s providing to purchase eBay for.
“Invariably, the audience, and I know a lot of people are going to ask, how does the math work for you, given the price tag of $56 billion, given the market cap of GameStop, which is a fraction of that? I know you have this $20 billion financing letter from TD, but sort of walk us through how you could get to that price and how it would work?” Ross Sorkin requested.
Cohen replied, “It’s on our website. It’s half cash, half stock, but the details are on our website.”
Ross Sorkin requested for extra clarification, “Can you help? I’ve read them, but can you help our audience understand them?”
Cohen replied, “Yeah, what—what part exactly?”
“I think we can start with the idea that the market cap of GameStop is, call it, $11 billion. You have $9 billion on your balance sheet. Arguably, if you’re providing effectively all of your stock, and then the cash, that gets you to 20. You have this letter from TD. That’s another 20. We’re now at 40. But we’re still off by, call it, 16. And the 20, as far as I understand, well, it’s considered a highly confident letter, meaning TD’s saying they’re highly confident that they would provide the financing. It’s not locked financing,” Ross Sorkin replied, laying out the numbers.
Cohen shot again, “Yeah, we’ll see what happens.”
Ross Sorkin gathered his ideas and added, “Um, I hear you. I understand that. I’m just trying to understand where the rest of the money would come from.”
Cohen replied curtly, “Half cash, half stock.”
Ross Sorkin pushed, “I hear you. I’m just saying that that math doesn’t get you to the price that you’re offering.”
“That’s a pretty straightforward question. I don’t get it. Like, where’s the rest of the money coming from? Andrew laid it out pretty clearly,” added co-host Rebecca Quick.
Cohen doubled down, “I don’t understand your question. We’re offering half cash, half stock, and we have the ability to issue stock in order to get the deal done. But the full details of the offer are on our website.”
Quick pressed once more, “But you’re on our air. We thought we’d get…”
Cohen remained aloof, “So, but I don’t understand your question.”
Watch the clip above by way of CNBC.
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