(Bloomberg) — GameStop Corp., led by Chief Executive Officer Ryan Cohen, is considering withdrawing its $56 billion bid for eBay Inc., according to people familiar with the matter.Cohen is considering proposing a partnership or joint venture that would enable eBay to leverage GameStop’s roughly 1,600 US retail locations, the people said, asking not to be identified because the matter is private. That could allow both to increase market share in high-margin categories such as trading cards and collectibles, the people said.GameStop, as one of eBay’s largest shareholders, would seek representation on eBay’s board as part of any partnership, they added.Since its offer in May, GameStop’s stock has fallen by almost a third while eBay’s has climbed about 3.5%. The $125-a-share offer was comprised of 50% cash and 50% in GameStop common stock.EBay’s shares closed down almost 4% to $107.71 on Monday, giving it a market value of $47.9 billion. Including debt, it’s valued at about $52 billion. GameStop’s shares were down almost 2% to $18.79 at the close of trading in New York. GameStop hasn’t made a final decision and Cohen could still weigh other options, the people said. A representative for GameStop couldn’t immediately be reached for comment, while a spokesperson for eBay declined to comment.The takeover bid was a bold move by Cohen after GameStop built a 5% stake in the far-larger ecommerce company. GameStop continued building that stake and, as of July 15, owned 9.75% of eBay, making it the company’s No. 2 shareholder, second only to Vanguard Group Inc. funds, according to data compiled by Bloomberg.While Grapevine, Texas-based GameStop has $8.4 billion in cash that could be deployed in a deal, its market value has sunk to $8.6 billion.The proposal followed some dramatic changes at GameStop, a chain of video game stores that shrank its brick-and-mortar footprint after gamers increasingly bought software online.In 2021, GameStop became the center of a retail-investor frenzy. Michael Burry, the Scion Asset Management head who rose to prominence after a winning wager against mortgages ahead of the 2008 financial crisis, helped fuel GameStop’s rally by taking a bullish stance on the firm around 2019.After the offer for eBay, Burry said he sold off his entire position, citing concerns about the debt GameStop could take on to fund the deal.While eBay has struggled to adapt to changing consumer preferences, shoppers still spend about $80 billion annually on its platform. About 136 million globally made purchases on the platform in the 12-month period ending March 31.Baker writes for Bloomberg.
