Ryan Cohen's eBay bid has been absurd all along

Ryan Cohen’s eBay bid has been absurd all along

Disgruntled millennial Ryan Cohen has had an interesting week.

Online marketplace eBay (EBAY) rejected his $55 billion deal to buy the company. The company called the unsolicited offer “neither credible nor attractive.”

Cohen has since taken to the airwaves to fire off a few prepared answers he thinks are funny and play well on social media.

“Ryan Cohen’s behavior throughout this entire process has been interesting, to say the least. Even bizarre at times,” Hennion & Walsh strategist Kevin Mahn said on Yahoo Finance’s Opening Bid (video above).

Let’s have an honest chat here.

The thought of this deal happening was absurd as soon as the play crossed the breaking news wires several weeks ago. It looks more absurd when watching Cohen talk through his thin plan to make this deal happen.

This is not the first time I took issue with Cohen.

In August 2022, I implored Bed Bath & Beyond investors not to believe that then-shareholder Cohen wanted to bring great things to the chain. He later dumped all his stock, and today the company remains on life support in some form.

In June 2023, I issued an open letter to Cohen inviting him to debate me on Yahoo Finance about what he planned to do with GameStop. The lack of disclosures has continued (where are the earnings calls?) and so have the retailer’s dreadful sales trends. Profits are up because there are fewer employees and stores are being closed.

Cohen never took me up on my challenge.

The reality is Ryan Cohen is no aspiring Warren Buffett (as his fans think), and his play for eBay has likely been a media-grabbing joke designed to get him a few headlines. There was no reason at all for eBay to consider this.

For one, eBay has shown good top- and bottom-line progress under CEO Jamie Iannone. GameStop’s sales have continued to dwindle.

Two, eBay’s stock is up 63% in the past year, while GameStop’s is down 22%. Since Cohen was named GameStop’s executive chair in June 2023, shares are down slightly — the S&P 500 (^GSPC) is up 71%.

And three, this would have been a high-leveraged deal that probably would have put the combined GameStop and eBay into junk rating territory.

What combined company wants to start their time together viewed as junk by creditors?

“It [the deal] really didn’t [pass the sniff test],” B. Riley chief market strategist Art Hogan told me on Opening Bid this week. “Sometimes you look at deals and say, well, maybe this could make sense. There was no way to get there on this particular deal. It felt like someone wanted to tie together two rocks to see if they would float. And clearly there was no way to get this financing through.”